P8-34B On October 31, 2012, Blossom Floral Supply had a $180,000 debit balance in

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P8-34B Accounting for uncollectible accounts using the allowance and direct

write-off methods, and reporting receivables on the balance sheet [20–30 min]

On October 31, 2012, Blossom Floral Supply had a $180,000 debit balance in

Accounts receivable and a $7,200 credit balance in Allowance for uncollectible

accounts. During November, Blossom made

sales on account, $560,000.

collections on account, $598,000.

write-offs of uncollectible receivables, $9,000.

Requirements

1. Journalize all November entries using the allowance method. Uncollectible

account expense was estimated at 1% of credit sales. Show all November activity

in Accounts receivable, Allowance for uncollectible accounts, and

Uncollectible account expense (post to these T-accounts).

2. Using the same facts, assume instead that Blossom used the direct write-off

method to account for uncollectible receivables. Journalize all November entries

using the direct write-off method. Post to Accounts receivable and Uncollectible

account expense and show their balances at November 30, 2012.

3. What amount of uncollectible account expense would Blossom report on its

November income statement under each of the two methods? Which amount

better matches expense with revenue? Give your reason.

4. What amount of net accounts receivable would Blossom report on its

November 30, 2012 balance sheet under each of the two methods? Which

amount is more realistic? Give your reason.