Frankel Inc. experienced the following transactions for 2014, its first year of operations:
1. Issued common stock for $60,000 cash.
2. Purchased $210,000 of merchandise on account.
3. Sold merchandise that cost $165,000 for $310,000 on account.
4. Collected $278,000 cash from accounts receivable.
5. Paid $190,000 on accounts payable.
6. Paid $46,000 of salaries expense for the year.
7. Paid other operating expenses of $62,000.
8. Frankel adjusted the accounts using the following information from an accounts receivable aging schedule.

Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare the income statement, statement of changes in stockholders€™ equity, balance sheet, and statement of cash flows for Frankel Inc. for 2014.
c. What is the net realizable value of the accounts receivable at December 31,2014?

Transcribed Image Text:

Number of Days Percent Likely to Be Uncollectible Allowance Balance Past Due Amount Current 0-30 31-60 61-90 Over 90 days $15,700 8,500 4,000 2,600 1,200 01 05 10 .20 -50