1. Record the transactions in the general ledger.

2. Open the allowance for Doubtful Accounts three-column ledger account, and post entries affecting that account. Keep a running balance.

3. Most companies report two-year comparative financial statements. If Thyme Companys Accounts Receivable balance was $299,500 and the Allowance for Doubtful Accounts stood at $9975 on December 31, 2013, show how the company will report its accounts receivable on a comparative balance sheet for 2014 and 2013.

4. Suppose, on December 31, 2014, the bad-debt expense was based on an estimate of 3 percent of the accounts receivable balance, rather than on the aging of accounts receivable. Record the December 31, 2014, entry for bad-debt expense in the general journal.

The November 30, 2014, balance sheet of Thyme Company reports the following:

Accounts Receivable: $358,000

Allowance for Doubtful Accounts (credit balance): $7,700

At the end of each quarter, Thyme estimates bad-debt expense to be 2 percent of credit sales. At the end of the year, the company ages its accounts receivable and adjusts the balance in Allowance for Doubtful Accounts to correspond to the aging schedule. During the last month of 2014, Thyme completes the following selected transactions:

Dec. 9 - Made a compound entry to write off the following uncollectible accounts: M. Yang, $710; Tory Ltd., $315; and S. Roberts, $1050

Dec. 18 Wrote off as uncollectible the $1360 account receivable from Acme Ltd. and the $790 account receivable from Data Services.

Dec. 31 Recorded bad-debt expense based on credit sales of $420,000.

Dec. 31 Recorded bad-debt expense based on the following summary of the aging of accounts receivable.

Age of Accounts

Accounts Receivable: 1-30 days 31-60 days 61-90 days Over 90 days

Total = $341,900 $188,400 $78,500 $40,500 $34,500

Estimated percent uncollectible 0.15% 0.5% 7.0% 35%

Req. 1

General Journal
DATE 2014		ACCOUNT TITLES AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
					*

* Computation:

Req. 2

ACCOUNT ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
DATE 2014		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE

Req. 3

Thyme Company
Comparative Balance Sheet
December 31, 2014, and December 31, 2013

Req. 4

General Journal
DATE 2014		ACCOUNT TITLES AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT