A B C D 2 Joey's Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. 3 During Year 1, its first year of operations, Joey's Bike Shop experienced the following. 4 5 6 7 Collections of accounts receivable 8 Uncollectible accounts charged off during the year 9 10 11 Sales on account Cash sales $260,000 $580,000 $235,000 $1,250 Required: a. Assume that Joey's Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its sales on account will not be collected. Answer the following questions: 12 13 14 Note: Use cell references from the given information above to complete these questions. 15 16 (1) What is the Accounts Receivable balance at December 31, Year 1? 17 (2) What is the ending balance of the Allowance for Doubtful Accounts at December 31, Year 1, after all entries and adjusting entries are posted? 18 (3) What is the amount of uncollectible accounts expense for Year 1? 19 (4) What is the net realizable value of accounts receivable at December 31, Year 1? 22 25 (1) What is the Accounts Receivable balance at December 31, Year 1? 20 21 b. Assume that Joey's Bike Shop uses the direct write-off method of accounting for uncollectible accounts. Answer the following questions: 22 23 Note: Use cell references from the given information above to complete these questions. 24 26 (2) What is the amount of uncollectible accounts expense for Year 1? $23,750 27 (3) What is the net realizable value of accounts receivable at December 31, Year 1? A Graded Worksheet + $1,350 $2,600 $22,400 1%

2 Joey's Bike Shop selis new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. 3 During Year 1, its first year of operations, Joey's Bike Shop experienced the following- Required: a. Assume that Joey's Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its sales on account will not be collected. 1% Answer the following questions: Note: Use cell references from the given information above to complete these questions. b. Assume that Joey's Bike Shop uses the direct write-off method of accounting for uncollectible accounts. Answer the following questions: Note: Use cell references from the given information above to complete these questions