1. The Allowance for Doubtful Account has a $18,700 credit balance prior to adjustment (unadjusted balance). Net credit sales during the year are $1,600,000 and of 8% are estimated to be uncollectible. Accounts Receivable has a balance of $775,700 at the ending of the year. Show the allowance account with the unadjusted balance, adjusting entry and adjusted balance (3 pts); and, calculate the amount of the account receivables that the business expects/estimates will be collectible.

AFDA Dr - Cr +

Unadjusted balance 1 pt Adjusting entry 1 pt Adjusted balance 1 pt

NRV of A/R = (1 pt for calculation and 1 pt for answer) 2. Calculate the estimated uncollectible account receivables based on the partial aging schedule below (3 pts) and journalize the adjusting entry to record bad debts on Dec 31, assuming the Allowance for Doubtful Accounts has a $8,115 debit unadjusted balance (4 pts).

Account Rec	Age	estimated of percent uncollectible	estimated uncollectible.
18,000	less than 1	5%	0.5 pt
90,000	1-3	15%	0.5 pt
39,000	3-6	25%	0.5 pt
12,000	6-9	65%	0.5 pt
2,250	9-12	90%	0.5 pt

Date Details Dr $ Cr $ Dec 31

Recording bad debts at year end 2 pts for correct amount

For the practical below, round any decimals to the nearest dollar.

3. 2020 Mar 14 Image Solutions received a $12,000, 60-day, 5% note from R. Jones for a loan

issued. Journalize the receipt of the note. (3 pts) Journal

Date Details Dr $ Cr $

Receipt of note for loan issued

1 pt for each entry and 1 pt for the amount May 13 The note is dishonored by Jones. State what this means and explain the accounting entries that Image Solutions should do to record the dishonored note. (4 pts) Ensure that you explain the accounting entries needed, including the amounts.

June 12 Image Solutions received payment on the dishonored note from May 13,

with 30 days additional interest at 9%. (3 pts) Journal Date Details Dr $ Cr $

Receipt of payment on dishonored note pt each entry and pt each amount

4. Fabrigas Ltd. received a 90- day, 10% note for $120,000, dated March 22, 2020 from a customer for goods sold. The cost of the goods sold is $12,800. a. Determine the due date of the note (day, month, year). (2 pts) b. Should Fabrigas Ltd. record an adjusting entry for accrued interest revenue for this note at the end of the current accounting period? (1 pt) Why or why not? (2 pts)