At the end of its first year of operations, a company is preparing financial statements but no year$-$end adjusting entries have yet been At the end of its first year of operations, a company is preparing financial statements but no year$-$end adjusting entries have yet been

made. The company's management provides the following range of estimates:

Future uncollectible accounts are estimated to be $5\%$ to $15\%$ of accounts receivable.

The estimated selling price of ending inventory $($NRV$)$ is $$4,000$ to $$12,000$ below cost.

Equipment purchased during the year will be depreciated over its estimated service life of $6$ to $12$ years.

Future warranty costs are estimated to be $4\%$ to $12\%$ of sales revenue.

Required:

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Select the more aggressive estimate for each of the four adjusting entries. What are the amounts for $($a$)$ net income, $($b$)$ total

assets, and $($c$)$ net cash flows? At the end of its first year of operations, a company is preparing financial statements but no year$-$end adjusting entries have yet been

made. The company's management provides the following range of estimates:

Future uncollectible accounts are estimated to be $5\%$ to $15\%$ of accounts receivable.

The estimated selling price of ending inventory $($NRV$)$ is $$4,000$ to $$12,000$ below cost.

Equipment purchased during the year will be depreciated over its estimated service life of $6$ to $12$ years.

Future warranty costs are estimated to be $4\%$ to $12\%$ of sales revenue.

Required:

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Indicate whether each of the two risk ratios and each of the two profitability ratios increases or decreases when aggressive

estimates are made compared to when conservative estimates are made.

made. The company's management provides the following range of estimates:

Future uncollectible accounts are estimated to be $5\%$ to $15\%$ of accounts receivable.

The estimated selling price of ending inventory $($NRV$)$ is $$4,000$ to $$12,000$ below cost.

Equipment purchased during the year will be depreciated over its estimated service life of $6$ to $12$ years.

Future warranty costs are estimated to be $4\%$ to $12\%$ of sales revenue.

Required:

Complete this question by entering your answers in the tabs below.

Required $1$

Select the more conservative estimate for each of the four adjusting entries. What are the amounts for $($a$)$ net income, $($b$)$

total assets, and $($c$)$ net cash flows?