A. On February 28, BigWhite Ski Equipment had a

$25,500 debit balance in Accounts Receivable. During March, the company had sales of

$65,500, which included $60,000 in credit sales. March collections were $53,000,

and write-offs of uncollectible receivables totalled $1,250. Other data include:

a.	February 28 credit balance in Allowance for Doubtful Account was $1,300.
b.	Bad debt expense was estimated as 3 percent of credit sales.

1.Prepare journal entries to record sales, collections, write-offs of uncollectibles during March, and bad debt expense by the allowance method (using the percent-of-sales method).

2.Prepare T-accounts to show the ending balances in Accounts Receivable and Allowance for Doubtful Accounts. Compute net Accounts Receivable at March 31. How much does

BigWhite

expect to collect?

B. At December 31, 2020, the Accounts Receivable balance of Stenner'sElectronics is $300,000. The Allowance for Doubtful Accounts has a(n) $8,900 credit balance. Accountants for Stenner'sElectronics prepare the following aging schedule for its accounts receivable:

		Age of Accounts Receivable
		30-Jan		31-60		61-90		Over 90
		Days		Days		Days		Days		Total
Accounts Receivable	$140,000		$80,000		$70,000		$10,000		$300,000
Estimated percent uncollectible	0.50%		2.00%		6.00%		50.00%
Allowance Needed

Required

1.	Journalize the adjusting entry for doubtful accounts based on the aging schedule. Show the T-account for the allowance at December 31, 2020.
2.	Show how Stenner'sElectronics will report Accounts Receivable on its December 31, 2020, balance sheet.
3.	Suppose all the facts of this situation are the same except that Allowance for Doubtful Accounts has a $900 debit balance. Calculate the amount of the adjusting entry.

C. Landscaping Services started the year 2020 with an Accounts Receivable balance of $40,500

and an Allowance for Doubtful Accounts balance of $4,310. During the year, $4,290

of accounts receivable were identified as uncollectible. Sales revenue for 2020 was $429,000,

including credit sales of $422,400. Cash collections on account were $415,600 during the year. The aging of accounts receivable yields these data.

		Age of Accounts
		0-30		31-60		61-90		Over 90		Total
		Days		Days		Days		Days		Receivables
Amount of receivable	$26,400		$6,600		$5,500		$4,510		$43,010
Percent uncollectible	1%		1%		3%		40%

Required:

1.	Journalize Angel's (a) credit sales, (b) cash collections on account, (c) write-off of the accounts receivable identified as uncollectible, and (d) bad debt expense based on 0.5 percent of credit sales.
2.	Prepare a T-account for the Accounts Receivable and Allowance for Doubtful Accounts accounts.
3.	Calculate the balance in the Allowance for Doubtful Accounts based on the aging-of-accounts-receivable method.
4.	Make any adjustment required to the Allowance for Doubtful Accounts based on your calculation in requirement 3.
5.	Show how Angel Landscaping Services should report Accounts Receivable on the balance sheet.

D. Franklin Ltd., a gift store, reported the following amounts in its 2020 financial statements. The

2019 figures are given for comparison.

	2020		2019
Current assets:
Cash		$12,000		$26,000
Short-term investments	46,000		22,000
Accounts receivable	$120,000		$148,000
Less: Allow. for doubtful accts	20,000	100,000	18,000	130,000
Inventory	384,000		378,000
Prepaid insurance	4,000		4,000
Total current assets	$546,000		$560,000
Total current liabilities	$218,000		$224,000
Net sales		$1,460,000		$1,464,000

Required

1.

Determine whether Franklin Ltd.'s acid-test ratio improved or deteriorated from 2019 to

2020. How does Franklin Ltd.'s acid-test ratio compare with the industry average of 0.90?

2.

Compare the days' sales in receivables measure for 2020 with the company's credit terms of net 30. What action, if any, should Franklin Ltd. take?

3.

Indicate the most likely effect of the following changes in credit policy on the days' sales in receivables (+ for increase, for decrease, and NE for no effect).

a.	Granted credit to people with poor credit history.
b.	Increased collection techniques or methods.
c.	Granted credit with discounts for early payment.

E. Planners accepted a $14,000 note from M. Bobatto in settlement of an old account receivable. The 3 percent note was dated December 2, 2019, and was due in four months.

1.	What is the journal entry on Phillips Planners's books on December 2, 2019?
2.	Assume that Phillips Planners's year-end is December 31. How much interest revenue is accrued on December 31, 2019?
3.	What is the amount of interest revenue in 2020?