Slow Running Shoes uses the Aging of receivables method to account for uncollectible accounts.

• The balance in the Allowance for uncollectible account as at Jan 1^st, 2010 was $10,500 (credit)
• The balance in the Accounts Receivable account as at Jan 1^st, 2010 was $133,000.

The company completed the following transactions during 2010 and 2011:

2010

June 10^th

Wrote off the balance of$600 from Manny Miller's account as uncollectible

September 15^th

Re-instated the account of Betty Lou and recorded the collection of $1200 as payment in full for her account which had been written off earlier

December 31^st

Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $14,100 of accounts receivable was estimated as uncollectible

December 31st

Made the closing entry for the uncollectible expense account

2011

Jan 17

Sold inventory to Jack Frost, $1100, on account

August 15

Wrote off as uncollectible the accounts of Barry Semper, $1,500;Maria Jesus $1,400 and Rory Paul $200

September 26

Received 40% of the amount owed by Jack Frost and wrote off the remainder as uncollectible

October 16

Received 20% of the funds owedfrom Maria Jesus as part payment of her account which had been written off earlier as uncollectible

December 31

The Aging schedule showed an estimated $7500 as uncollectible

1. Assume that the percentage of sales method was used instead by the company and that on December 31^st, 2010 5% of 2010 's credit sales are estimated to be uncollectible. Assume Sales for 2010 were 520,000 (60% relates to cash sales)
2. Determine the amount to be charged to the uncollectible expense account.
3. Prepare the Allowance for uncollectible account for 2010, using this method
4. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 2010