Allowance for Uncollectible Accounts - Aging Method Sales-R-Us beginning general ledger shows an allowance for doubtful accounts balance of $10,000 credit balance. The year-end trial balance before adjustments, reports gross accounts receivable of $100,000 and allowance for doubtful accounts of $5,000 credit. Be sure to use the proper format for all JEs (Journal Entries). 1. 2. Using the aging method, the company estimates that it will be unable to collect 11% of the total accounts receivable at year end. Write the journal entry for updating their ADA account at year end. After making the required journal entry for

bad debts at year end, what is the ending balance in allowance for uncollectible accounts? Allowance For Doubtful Accounts 3. On December 31, how much (in total) is owed to Sales-R-Us by customers? What do they expect to receive (the "net realizable value") from customers? 4. Obviously, during the year, some of the ADA was written off, please show the correct JE that had been done to bring the ADA account down?

Financial Assets Homework - Solutions 3 Notes Receivable Matchbox Corporation sells a car to Farnhardt Corporation on July 1, x, and accepts a nine-month, 10\% promissory noteote receivable from Earnhardt for $48,000. Matchbox's year-end is December 31. All interest is due/payable at the time the note matures (March 31 , x2 ). Assume you are Matchbox Corporation. Use the proper format for all Journal Entries (JE). 1. Record Matchbox's original JE when they receive the note on July 1 , x1 (when Earnhardt purchased the car.) 2. Record the AJE that Matchbox will need to make at December 31,xi, related to interest (if needed). Assume that no adjusting entries have been made since the original entry to record the note was made on July 1,x1. 3. Record the entry that Matchbox will make when the note matures on March 31,x2. Financial Assets Homework - Solutions 2 Allowance for Uncollectible Accounts - Percentage of Sales Method On January 1, the Sell-U-Anything Company had a beginning balance in Accounts Receivable of \$40,00o Debit, and a beginning balance in the Allowance for Uncollectible Accounts of $1,100 Credit. During the year, the company reported $140,000 of credit sales and $10,000 of Cash Sales. During the year, cash collections of receivables amounted to $129,000 and $1,500 of customer receivables were written off as uncollectible. Using the information above, complete the following: 1. What is the ending accounts receivable balance at December 31 ? 2. The company estimates that it will be unable to collect 3% of credit sales. Write the journal entry for updating their Allowance account at year end. 3. What will allowance account be at December 31,2016 using this allowance method? 4. What Allowance for Uncollectible Accounts Method reflects a Balance Sheet Approach? Which one reflects an Income Statement Approach? Financial Assets Homework - Solutions 3 Notes Receivable Matchbox Corporation sells a car to Farnhardt Corporation on July 1, x, and accepts a nine-month, 10\% promissory noteote receivable from Earnhardt for $48,000. Matchbox's year-end is December 31. All interest is due/payable at the time the note matures (March 31 , x2 ). Assume you are Matchbox Corporation. Use the proper format for all Journal Entries (JE). 1. Record Matchbox's original JE when they receive the note on July 1 , x1 (when Earnhardt purchased the car.) 2. Record the AJE that Matchbox will need to make at December 31,xi, related to interest (if needed). Assume that no adjusting entries have been made since the original entry to record the note was made on July 1,x1. 3. Record the entry that Matchbox will make when the note matures on March 31,x2. Financial Assets Homework - Solutions 2 Allowance for Uncollectible Accounts - Percentage of Sales Method On January 1, the Sell-U-Anything Company had a beginning balance in Accounts Receivable of \$40,00o Debit, and a beginning balance in the Allowance for Uncollectible Accounts of $1,100 Credit. During the year, the company reported $140,000 of credit sales and $10,000 of Cash Sales. During the year, cash collections of receivables amounted to $129,000 and $1,500 of customer receivables were written off as uncollectible. Using the information above, complete the following: 1. What is the ending accounts receivable balance at December 31 ? 2. The company estimates that it will be unable to collect 3% of credit sales. Write the journal entry for updating their Allowance account at year end. 3. What will allowance account be at December 31,2016 using this allowance method? 4. What Allowance for Uncollectible Accounts Method reflects a Balance Sheet Approach? Which one reflects an Income Statement Approach