Accounts receivable were not collectible and wrote them

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Reference no: EM13929754

Pate Bros. uses the allowance method to account for uncollectible accounts expense. Pate experienced the following four events in 2013:

1. Recognized $68,000 of revenue on account. 
2. Collected $62,000 cash from accounts receivable. 
3. Determined that $500 of accounts receivable were not collectible and wrote them off. 
4. Recognized uncollectible accounts expense for the year. Pate estimates that uncollectible accounts expense will be 2 percent of its sales. 

Required: 

a. Show the effect of each of these events on the elements of the financial statements, using a horizontal statements model like the following one. Use + for increase, Use - for decrease, and NA for not affected. In the cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA).

48_264-B-A-C-R (1674).png

b. Record the above transactions in general journal form. 

Reference no: EM13929754

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