On May 31, Rosetree Floral Supply had a $160,000 debit balance in Accounts Receivable and a $6, 400 credit balance in Allowance for Uncollectible Accounts. During June, Rosetree made: Sales on account, $560,000 Collections on account, $601,000. Write-offs of uncollectible receivables, $8,000 Requirements Record sales and collections on account. Then record uncollectible- account expense (2% of credit sales) and write-offs of customer accounts for June using the allowance method. Show all June activity in Accounts Receivable, Allowance for Uncollectible Accounts, and Uncollectible-Account Expense (post to these T-accounts). (pp. 460, 461-462, 464) Suppose Rosetree used a different method to account for uncollectible receivables. Record sales and collections on account. Then record uncollectible-account expense for June using the direct write- off method. Post to Accounts Receivable and Uncollectible-Account Expense and show their balances at June 30. (pp. 465-466) What amount of uncollectible-account expense would Rosetree report on its June income statement under each of the two methods? Which amount better matches expense with revenue? Give your reason. (pp. 461-462, 465-66) What amount of net accounts receivable would Rosetree report on its June 30 balance sheet under each of the two methods? Which amount is more realistic? Give your reason. (pp. 465-466, 469) On May 31, Rosetree Floral Supply had a $160,000 debit balance in Accounts Receivable and a $6, 400 credit balance in Allowance for Uncollectible Accounts. During June, Rosetree made: Sales on account, $560,000 Collections on account, $601,000. Write-offs of uncollectible receivables, $8,000 Requirements Record sales and collections on account. Then record uncollectible- account expense (2% of credit sales) and write-offs of customer accounts for June using the allowance method. Show all June activity in Accounts Receivable, Allowance for Uncollectible Accounts, and Uncollectible-Account Expense (post to these T-accounts). (pp. 460, 461-462, 464) Suppose Rosetree used a different method to account for uncollectible receivables. Record sales and collections on account. Then record uncollectible-account expense for June using the direct write- off method. Post to Accounts Receivable and Uncollectible-Account Expense and show their balances at June 30. (pp. 465-466) What amount of uncollectible-account expense would Rosetree report on its June income statement under each of the two methods? Which amount better matches expense with revenue? Give your reason. (pp. 461-462, 465-66) What amount of net accounts receivable would Rosetree report on its June 30 balance sheet under each of the two methods? Which amount is more realistic? Give your reason. (pp. 465-466, 469)
