P8-27A At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC)

At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC) include the following:

 

Accounts receivable $145,000

Allowance for uncollectible accounts (credit balance) 3,500

During the last quarter of 2012, MTMC completed the following selected transactions:

Dec 28 Wrote off accounts receivable as uncollectible: Regan, Co., $1,300; Owen Mac, $900; and Rain, Inc., $700.

Dec 31 Recorded uncollectible account expense based on the aging of accounts receivable, as follows:

                               

                                                   Age of Accounts            

Accounts receivable                1–30 Days    31–60 Days   61–90 Days   Over 90 Days

$165,000                          $97,000               $ 37,000            $ 14,000       $ 17,000

Estimated percent uncollectible 0.3%             3%                     30%              35%

 

Requirements:

1. Journalize the transactions.

2. Open the Allowance for uncollectible accounts T-account, and post entries affecting that account. Keep a running balance.

3. Show how Mountain Terrace Medical Center should report net accounts receivable on its December 31, 2012 balance sheet. Use the three line reporting format.