Sam and Robert are identical twins. They opened identical businesses and experienced identical transactions. However, they decided to estimate uncollectible accounts in different ways. Sam elected to use the percentage of sales method, and Robert elected to use the percentage of receivables method. Listed below are the beginning balances of Cash, Accounts Receivable, and Allowance for Doubtful Accounts [items (a)(c)], and summary transactions that occurred during the year [items (d)(g)] for both businesses. Remember, both businesses experienced the same events: credit sales, collections of receivables, and write-offs. The only difference between the businesses is the method of estimating uncollectible accounts.

Robert

(a) Balance of Cash, January 1, 20--

$300,000

(b) Balance of Accounts Receivable, January 1

50,000

(c) Balance of Allowance for Doubtful Accounts, January 1

5,000

(d) Sales on account during 20--

550,000

(e) Collections on account during 20--

530,000

(f) Uncollectible accounts written off during 20--

4,500

(g) Collections made on accounts written off during 20--

500

Approach this problem from Roberts point of view.

Required:

6.	Prepare entries in a general journal (page 4) for summary transactions (d) through (g) for Robert.
7.	Post the entries to a general ledger for Robert, using the same accounts and numbers as were used for Sam.
8.	Robert bases the estimate of uncollectible accounts on an aging schedule of accounts receivable. Using the following information, compute the estimated uncollectible amounts and make the appropriate adjusting entry in a general journal. Post the entry to the general ledger accounts on December 31, 20--.

Customers

Invoice Dates and Amounts for Unpaid Invoices

Beets, D.

10/7

$2,300

11/15

$1,200

12/18

$8,500

Cook, L.

6/1

1,200

8/15

2,500

Hylton, D.

9/23

4,300

10/22

2,500

12/23

2,800

Martin, D.

10/15

5,400

11/12

3,200

12/15

1,500

Stokes, D.

9/9

200

12/15

9,500

Taylor, T.

11/20

400

12/10

1,400

Thomas, O.

12/2

5,500

Tower, R.

12/15

2,300

Williams, G.

11/18

2,800

12/8

8,000

All sales are billed n/30. The following aging chart is used to estimate the uncollectibles using the percentage of receivables method:

	Estimated Percent
Age Interval	Uncollectible
Not yet due	2%
130 days	5
3160 days	10
6190 days	25
91120 days	50
Over 120 days	80

9.	Compute the net realizable value of Roberts accounts receivable on December 31, 20--.

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QUESTION

8. Robert bases the estimate of uncollectible accounts on an aging schedule of accounts receivable. Using the following information, complete the aging of receivables schedule and compute the estimated uncollectible accounts.

AGING SCHEDULE OF ACCOUNTS RECEIVABLE FOR ROBERT
					Number of Days Past Due
Customer	Total	Not Yet Due	130	3160	6190	91120	Over 120
Beets, D.
Cook, L.
Hylton, D.
Martin, D.
Stokes, D.
Taylor, T.
Thomas, O.
Tower, R.
Williams, G.
Total
Estimated percent uncollectible		.02	.05	.10	.25	.50	.80
Total estimated uncollectible accounts

9. Compute the net realizable value of Roberts accounts receivable on December 31, 20--.