2 P6-6 Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios LO6-4 10 points IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30, 2020: April 10: Received an order from Peter's Appliances, a wholesaler, for 38 machines. April 30: Sold 57 machines to Yuri Inc. on credit. May 1: The purchasing manager of Peter's Appliances visited IceKreme's factory and purchased 42 machines on credit, instead of the 38 machines that were previously ordered. May 5: Yuri Inc. paid for the machines purchased on April 30. May 7: Sold 20 machines to Cheng Ltd. on credit. May 10: Wrote off $17,000 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1, 2020. May 15: Peter's Appliances returned two defective machines and paid the amount due. June 1: Received $96,000 from Cheng Ltd. on account. June 30: Recovered $3,800 from the receivables that were written off on May 10. Additional information is as follows: IceKreme sold all machines at $6,000 per unit. All of IceKreme's sales were on credit with terms 2/10, n/30. IceKreme's records included the following items and their balances as at March 31, 2020: Accounts receivable Allowance of doubtful accounts (credit balance) Net sales $ 76,000 23,400 760,000 Required: 1. Prepare the journal entries to record the transactions that occurred from April 1 to June 30, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) % Answer is not complete. No Date General Journal Debit Credit 2 April 30 Accounts receivable 342,000 Sales revenue 342,000 3 May 01 Accounts receivable 252,000 Sales revenue 252,000 4 May 05 Cash Sales discounts Accounts receivable 5 May 07 Accounts receivable Sales revenue 6 May 10 Allowance for doubtful accounts Accounts receivable 7 May 15 Cash Sales allowances and returns Accounts receivable 8 June 01 Cash Accounts receivable 9 June 30 Cash x Allowance for doubtful accounts 10 June 30 x No journal entry required Accounts receivable int 2. The company uses the aging of accounts receivable method to determine the amount of bad debt expense. The estimated uncollectible rates for the various age groups are as follows: (Hint: Use a timeline to keep track of accounts receivable in order to determine the age of these receivables.) ences Aging of accounts receivable Not yet 1-30 days due past due 5% 10% 31-60 days past due 15% Over 60 days past due 20% Estimated % uncollectible a. Determine the amount of receivables that may not be collectible in the future as on June 30, 2020. Amount of uncollectible b. Prepare the journal entry to record bad debt expense at June 30, 2020, the company's fiscal year-end. (If no entry is required for a transaction/event, select "No jou entry required" in the first account field.) View transaction list Journal entry worksheet Record the bad debt expenses estimated for the period. Note: Enter debits before credits. Date General Journal Debit Credit June 30 Record entry Clear entry View general journal 3. IceKreme's net accounts receivable were $96,000 at June 30, 2019. Calculate IceKreme's average collection period for fiscal year 2020. (Use 365 days a year. Round intermediate calculations to 2 decimal places. Round the final answer to 1 decimal place.) Average collection period days 4. This part of the question is not part of your Connect assignment. P6-12 Preparing a Bank Reconciliation and Related Journal Entries LO6-7 The bookkeeper at Hopkins Company has not reconciled the bank statement with the cash account, saying instead, I don't have time. You have been asked to prepare a reconciliation and review the procedures with the bookkeeper. The April 30, 2021, bank statement and the April ledger accounts for cash showed the following (summarized): Bank Statement Balance, April 1, 2021 Deposits during April Notes collected for company (including $88 interest) Cheques cleared during April NSF cheque-A. B. Wright Bank service charges Balance, April 30, 2021 Cheques Deposits Balance $34,600 $ 37,900 72,500 1,360 73,860 $46,300 27,560 178 27,382 88 27, 294 27, 294 Apr. 1 Balance Apr. Deposits Cash in Bank 25,300 Apr. Cheques written 44,200 42,900 Cash on Hand Apr. 30 Balance 280 A comparison of cheques written before and during April with the cheques cleared through the bank showed that cheques of $5,900 are still outstanding at April 30. No deposits in transit were carried over from March, but a deposit was in transit at April 30. Required: 1. Prepare a detailed bank reconciliation at April 30, 2021. HOPKINS COMPANY Bank Reconciliation, April 30, 2021 Bank Statement Company's Books Additions: Additions: 0 0 0 Deductions: Deductions: 0 Ending correct cash balance $ 0 Ending correct cash balance $ 0 es 2. Prepare any required journal entries as a result of the reconciliation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record note receivable plus interest collected. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal 3. What were the balances in the cash accounts in the ledger on May 1, 2021? Balance in cash in bank account Balance in cash on hand account 4. What total amount of cash should be reported on the statement of financial position at April 30, 2021? Statement of financial position (April 30, 2021): Current assets: Cash View uansacuon list X Record note receivable plus interest collected. > B Record customer's cheque returned due to insufficient funds. C Record service charges collected by the bank. lit Note : = journal entry has been entered Record entry Clear entry View general journal 3. What were the balances in the cash accounts in the ledger on May 1, 2021? Balance in cash in bank account Balance in cash on hand account 4. What total amount of cash should be reported on the statement of financial position at April 30, 2021? Statement of financial position (April 30, 2021): Current assets: Cash