On June 30, 2017, Perfect Party Planners (PPP) had a $40,000 balance in Accounts Receivable and a $3,000 credit balanc
On June 30, 2017, Perfect Party Planners (PPP) had a $40,000 balance in Accounts Receivable and a $3,000 credit balance in Allowance for Uncollectible Accounts. During July, PPP made credit sales of $75,000. July collections on account were $60,000, write-offs of uncollectible receivables totalled $2,200, and an account of $1,000 was recovered. Bad debt expense is estimated to be $1,500.
1. Journalize sales, collections, write-offs of un-collectibles, recovery of accounts receivable, and bad debt expense by the allowance method during July. Explanations are not required.
2. Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Net Accounts Receivable at July 31. How much does PPP expect to collect?
3. Show how PPP will report Accounts Receivable on its July 31 balance sheet. Use the format "Accounts Receivable, net of allowance for uncollectible accounts of $-" at July 31, 2017. Insert the value you've calculated for the allowance?