P5-66A. (Learning Objective 4: Accounting for revenue, collections, and uncollectibles) This problem takes you through the accounting for sales, receivables, and uncollectibles for Mail Time Corp., the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At May 31, 20X6 and 20X7, respectively, Mail Time Corp. reported the following on its Balance Sheet (in millions of dollars): May 31 20X7 20X6 Accounts receivable....... Less: Allowance for uncollectible accounts. Accounts receivable, net.... $3,703 (139) $3,564 $3,345 (166) $3,179 During the year ended May 31, 20X7, Mail Time Corp. earned service revenue and col- lected cash from customers. Assume that Mail Time wrote off uncollectible receivables. Al 1. Prepare T-accounts for Accounts Receivable and Allowance for Uncollectibles and insert 2. Journalize the following assumed transactions of Mail Time Corp. for the year ended May year-end Mail Time ended with the foregoing May 31, 20X7, balances. Requirements the May 31, 20X6, balances as given. 31. 20X7 (explanations are not required): a. Service revenue on account, $32,491 million b. Collections from customers on account, $31,779 million c. Write-offs of uncollectible accounts receivable, $354 million d. Uncollectible-account expense, $327 million 3. Post your entries to the Accounts Receivable and the Allowance for Uncollectibles T-accounts. 4. Compute the ending balances for the two T-accounts and compare your balances to the ac- tual May 31, 20X7, amounts. They should be the same. 5. Show what Mail Time would report on its Income Statement for the year ended May 31, 20X7