ACCT:2100 Fall 2018 Chapter 6 Take-Home Quiz Following are the monthly credit sales, collections and bad debt write-offs for Clarion Distributing, Inc. for its second quarter ending July 31, 2018. Month May June July Sales Collections Write-Offs 1,000 $ 87,500 S95,000 81,000 105,000 S 281,000 108,000 95,000 S 290,50 3,500 S 4,500 Total Clarion's controller prepared the following aging of accounts receivable as of July 31, 2018: Account Classification Current 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Balance $50,000 37,000 18,000 1,000 5,000 Percent Uncollectable 196 5% 10% 20% 50% The allowance for doubtful accounts balance on April 30, 2018 was $8,950. Payments for credit sales are duc 30 days from the date of sale. Requireda Clarion uses the accounts receivable aging, and an analysis of specific overdue accounts to determine the allowance for doubtful accounts. The over 90 days past due category includes a $3,000 receivable from a customer undergoing liquidation. Clarion estimates that it will collect only 10% of the balance due. Prepare any adjusting journal entries necessary at 7/31/18. Show what would be reported on the April 30, 2018 and July 31, 2018 balance sheets, and second quarter income statement and statement of cash flow related to the above activity. Present the statement of cash flow information using both the direct and indirect methods. Calculate the annual accounts receivable turnover ratio for the quarter ending July 31, 2018. 1. 2. 3. 4. Based on this activity, do you have any recommerndations for Clarion regarding its management of accounts receivable