Exercise 7-12 Write-Off of Accounts Receivable

Maxim Company, which uses the allowance method, has accounts receivable of $130,000 and an Allowance for Uncollectible Accounts of $12,800 (credit). The company sold merchandise to Olga Boruc for $14,400 and later received $4,800 from Boruc. The rest of the amount due from Hegerman had to be written off as uncollectible.

Using T accounts, show the beginning balances and the effects of the Boruc transactions on Accounts Receivable and Allowance for Uncollectible Accounts.

Accounts Receivable
Bal.
Sale		Collection
Bal.
		Write-off
Bal.

Allowance for Uncollectible Accounts
Write-off		Bal.
		Bal.

What is the amount of net accounts receivable before and after the write-off?

	Net accounts receivable
Before Write-off:	$
After Write-off:	$