This problem takes you through the accounting for sales, receivables, and uncollectibles for FedEx Corporation, the overnight

Question:

This problem takes you through the accounting for sales, receivables, and uncollectibles for FedEx Corporation, the overnight shipper. By selling on credit, FedEx cannot expect to collect 100% of its accounts receivable. At May 31, 20X6, and 20X5, respectively, FedEx reported the following on its balance sheet (adapted and in millions of dollars):

During the year ended May 31, 20X6, FedEx earned service revenue and collected cash from customers. Assume uncollectible-account expense for the year was 1% of service revenue and that FedEx wrote off uncollectible receivables. At year end FedEx ended with the foregoing May 31, 20X6, balances.
Required
1. Prepare T-accounts for Accounts Receivable and Allowance for Uncollectibles and insert the May 31, 20X5, balances as given. (pp. 271-274)
2. Journalize the following assumed transactions of FedEx, Inc., for the year ended May 31, 20X6 (explanations are not required).
a. Service revenue on account, $32,300 million.
b. Collections on account, $31,758 million.
c. Uncollectible-account expense, 1% of service revenue.
d. Write-offs of uncollectible accounts receivable, $304 million.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...