Averys All-Natural Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Averys All-Natural prepared the following aging-of-receivables schedule as of the end of business on December 31, 20Y7:

					Days Past Due
Customer	Balance	Not Past Due			130	3160	6190	91120	Over 120
AAA Beauty	27,500		27,500
Amelia's Wigs	3,750					3,750
Zim's Beauty	1,650				1,650
Totals	1,100,000		750,000		180,000	75,000	45,000	22,000	28,000

Averys All-Natural Company has a past history of uncollectible accounts by age category, as follows:

Age ClassPercent Uncollectible Not past due 1%130 days past due 3 3160 days past due 7 6190 days past due 16 91120 days past due 40 Over 120 days past due 90

3. Averys All-Natural Company reported credit sales of $2,400,000 during 20Y7. Assume that instead of using the analysis of receivables method of estimating uncollectible accounts, Averys All-Natural uses the percent of sales method and estimates that 2.5% of sales will be uncollectible. Illustrate the effect on the accounts and financial statements of the adjustment for uncollectible accounts using the percent of sales method.

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

4. Assume that on March 4, 20Y8, Averys All-Natural wrote off the $2,950 account of Superior Images as uncollectible. Illustrate the effect on the accounts and financial statements of the write-off of the Superior Images account.

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

5. Assume that on August 17, 20Y8, Superior Images paid $2,950 on its account. Illustrate the effect on the accounts and financial statements of reinstating and collecting the Superior Images account.

(a) Reinstatement

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

(b) Collection

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

6. Assume that instead of using the allowance method, Averys All-Natural uses the direct write-off method. Illustrate the effect on the accounts and financial statements of the following:

a. The write-off of the Superior Images account on March 4, 20Y8.

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

b. The (1) reinstatement and (2) collection of the Superior Images account on August 17, 20Y8.

(1) reinstatement

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

(2) collection

If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.