On June 30, 2020, Perfect Party Planners (PPP) had a $40,000 balance in Accounts Receivable and a
Question:
On June 30, 2020, Perfect Party Planners (PPP) had a \$40,000 balance in Accounts Receivable and a \(\$ 3,000\) credit balance in Allowance for Uncollectible Accounts. During July, PPP made credit sales of \(\$ 75,000\). July collections on account were \(\$ 60,000\), write-offs of uncollectible receivables totalled \(\$ 2,200\), and an account of \(\$ 1,000\) was recovered. Bad debt expense is estimated to be \(\$ 1,500\).
{Requirements}
1. Journalize sales, collections, write-offs of uncollectibles, recovery of accounts receivable, and bad debt expense by the allowance method during July. Explanations are not required.
2. Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Net Accounts Receivable at July 31. How much does PPP expect to collect?
3. Show how PPP will report Accounts Receivable on its July 31 balance sheet. Use the format "Accounts Receivable, net of allowance for uncollectible accounts of \$-" at July 31, 2020. Insert the value you've calculated for the allowance.
Step by Step Answer:
Financial Accounting
ISBN: 9780135433065
7th Canadian Edition
Authors: Walter Harrison, Wendy Tietz, C. Thomas, Greg Berberich, Catherine Seguin