For the method of accounting for the uncollectibles used, show:

A) The balance sheet presentation of the accounts receivable.

B) The overall effect of the uncollectibles on the income statement for the months of June and July 2014.

Airdrie Services Inc. started business on March 1, 2014. The company produces monthly financial statements and had total sales of $600,000 (of which $570,000 were on account) during the first four months.

On June 30, the Accounts Receivable account had a balance of $210,000 (no accounts have been written off to date), which was made up of the following accounts aged according to the date the services were provided.

The following accounts receivable transactions took place in July 2014:

July 12 Determine the account of Vesuvus Ltd. was uncollectible and wrote it off.

July 15 Collect $4200 from Torrance Trucks for services in the first three months.

July 21 Decided the account of Lou Del Rio was uncollectible and wrote it off.

July 24 Collected $6408 from Mort Black for services in the month of March.

July 26 Received a cheque from Lou Del Rio for $9600 plus two cheques, of $9408 each, post-dated to September 10 and November 10.

July 31 Total sales of service in the month were $162,000; 90 percent of these were on account and 60 percent of the sales on account were collect in the month

General Journal
DATE 2014			ACCOUNT TITLES AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
a.
June	30	2014	Bad Debt Expense		11,033.64
			Allowance for Doubtful Accounts			$11,033.64
b.
July	12	2014	Allowance for Doubtful Accounts		8620
			Accounts receivable			8620
July	15	2014	Cash		4200
			Accounts receivable			4200
July	21	2014	Allowance of Doubtful Accounts		28416
			Accounts receivable			28416
July	24	2014	Cash		6408
			Accounts receivable			6408
July	26	2014	Accounts Receivable		28416
			Allowance for Doubtful accounts			28416
			Cash		9600
			Accounts Receivable			9600
July	31	2014	Accounts receivable		145800
			Cash		16200
			Service revenue			162000
			Cash		87480
			Accounts Receivable			87480
c.
July	31	2014	Bad Debt Expense		15651.08
			Allowance for doubtful Accounts			15651.08