QUESTION 3 (20 MARKS) The June 30, 2014, balance sheet of East Terrace Medical Centre (ETMC) reports the following: Allowance for Uncollectible Accounts (Cr) 7,100 At the end of each quarter, ETMC estimates uncollectible-account expense to be 2% of credit sales. At the end of the year, ETMC ages its accounts receivable. ETMC then adjusts the balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule During the second half of 2014, ETMC completed the following transactions: July 14 Made a compound entry to write off uncollectible accounts TJ. Dooley, $700; Design works, $2,400; and S. Dewitt, $100 Recorded uncollectible-account expense equal to 2% of credit sales of $140,000 Wrote off accounts receivable as uncollectible Transnet, $1,300; Webvan, $2,100; and Alpha Group, $700 Recorded uncollectible-account expense based on the aging of Sept. 30 Nov. 22 Dec. 31 receivables. Age of Accounts 1-30 31 60 61 90 Over 90 Total $255,000 Estimated $120,000 $80,000 $40,000 $15,000 nt(96) uncollectible 0.5% 4% Required i Record the transactions in the general journal, clearly showing all workings ii Open the Allowance for Bad-Debts Account and post entries affecting that iii Show how East Terrance Medical Centre should report accounts receivable iv) including the aging schedule used to estimate the amount of Bad-Debt Expense at December 31 account. Keep a runnina balance. on its balance sheet at December 31, 2014. Use the three line reporting (2 marks) Assume that on February 25, 2015 ETMC received a cheque for $2,400 from Design Works, along with a letter apologizing for being so late. State the journal entries necessary to record this event, assuming that the debtor Design Works is reinstated How would the transaction in (d) above be recorded if ETMC used the direct write-offmethod to account for bad-debts? (4 marks) v)