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In: AccountingAnalyzing and Reporting Receivable Transactions andUncollectible Accounts Using Percentage- of-Sales Method toEstimate Bad Debt...Analyzing and Reporting Receivable Transactions andUncollectible Accounts Using Percentage- of-Sales Method toEstimate Bad Debt ExpenseAt the beginning of the year, Penman Company had the followingaccount balances.Accounts receivable...................... $356,000Allowance for uncollectible accounts......... 21,400During the year, Penman’s credit sales were $2,008,000, andcollections on accounts receivable were $1,963,000. The followingadditional transactions occurred during the year.Feb. 17 Wrote off Bava’s account, $8,200.May 28 Wrote off Reed’s account, $4,800.Dec. 15 Wrote off Fischer’s account, $2,300.Dec. 31 Recorded the bad debts expense assuming Penman’s policyis to record bad debts expense as 0.9% of credit sales. (Hint: Theallowance account is increased by 0.9% of credit salesregardless of write-offs.)Compute the ending balances in accounts receivable and theallowance for uncollectible accounts. Show how Penman’s December 31balance sheet reports the two accounts