Reference no: EM132708812
Consider the following July transactions for M&T Plumbing Company, whose owner is Michael Thums,
July 1: Performed plumbing services for Pasthas' for $8,000 on terms 3/10, n/20.
3: M&T Plumbing decides to adopt the allowance method. Uncollectible account expense is estimated at 2% of credit sales.
10: Borrowed money from Bank of America, $10,000, 7% for 180 days.
12: After discussions with Charles's Wig Stand, Michael Thums has determined that $225 of the receivable owed to M&T Plumbing will not be collected. Write off this portion of the receivable.
15: Sold goods to WaterCounty for $4,000 on terms 4/10, n/30. Cost of goods sold was $600.
15: Recorded uncollectible account expense estimated at 2% for WaterCounty sale.
28: Sold goods to PlumbPlus, for cash of $1,200 (cost $280).
28: Collected from Charles's Wig Stand $225 of receivable previously written off. Reinstated the remaining balance of Charles's receivable.
29: Paid cash for utilities of $350.
31: Created an aging schedule for M&T Plumbing for accounts receivable. M&T determined that accounts 1-20 days old were 2% uncollectible and accounts over 20 days old were 15% uncollectible. Prepared an aging schedule and adjusted the Allowance for uncollectible.
Charles's Wig Stand - Balance at June 30, 2013 was 1,775.
31: M&T Plumbing prepared all other adjusting entries necessary for July.
Problem 1. Prepared all required journal entries and post them to M&T Plumbing's ledger.
a. Complete also transactions for July 31.
Problem 2. Reconcile the Accounts receivable control account to the Accounts receivable subsidiary ledger.