Reconstructing transactions affecting accounts receivable and uncollectible accounts.

The sales, all on account, of Pins Company in Year 10, its first year of operations, were

$700,000. Collections totaled $500,000. On December 31, Year 10. Pins Company estimated that 2 percent of all sales would probably be uncollectible. On that date. Pins Company wrote off specific accounts in the amount of $8,000.

The balances in selected accounts on December 31, Year 11, are as follows:

Accounts Receivable (Dr.) 300,000 Allowance for Uncollectible Accounts (Dr.) 10,000 Retained Earnings (Bad Debt Expense) — —

Retained Earnings (Sales) (Cr.) 800,000 The amounts shown for bad debt expense and sales revenue are the amount, if any. recorded in the accounts during Year 1 1. On December 31. Year 1 1, Pins Company carried out an aging of its accounts receivable balances and estimated that the Year 1 1 ending balance of accounts receivable contained $1 1,000 of probable uncollectibles. That is. the allowance account should have an $1 1.000 ending credit balance. It made adjusting entries appropriate for this estimate.

Some of the $800,000 sales during Year 1 1 were for cash and some were on account: the problem purposefully does not give the amounts.

a. What was the balance in the Accounts Receivable (gross) account at the end of Year 101 Give the amount and whether it was a debit or a credit.

b. What was the balance in the Allowance for Uncollectible Accounts account at the end of Year 10"! Give the amount and whether it was a debit or a credit.

c. What was bad debt expense for Year //?

d. What was the amount of specific accounts receivable written off as being uncollectible

e. during What were Year total II'! cash collections in Year II from customers (for cash sales and collections from customers who had purchased on account in either Year 10 or Year I 1 )?

f. What was the net balance of accounts receivable included in the balance sheet asset total for December 31, Year II!