Becca’s Finance and Collection Company had the following year-end balances in its financial statements:

1999 2000 Accounts receivable $300,000 $500,000 Allowance for uncollectibles (50,000) (50,000)

Interest and finance revenue 150,000 300,000 Required

a. Assess the adequacy of the 2000 balance in the allowance for uncollectibles.

b. Describe the interest and finance revenue account.What does this account include? On which financial statement does it appear?

c. Calculate the accounts receivable as a percentage of revenues for each year.

Evaluate the trends in this ratio.

d. Assume that the credit-worthiness of Becca’s customer base significantly deteriorated at the end of 2000.Assess the adequacy of its allowance for uncollectibles under these new circumstances.