Question
BE8.11 (LO 2, 4) During its first year of operations, Fertig Retail had credit sales of R$3,000,000, of which R$400,000 remained uncollected at year-end. The
BE8.11 (LO 2, 4) During its first year of operations, Fertig Retail had credit sales of R$3,000,000, of which R$400,000 remained uncollected at year-end. The credit manager estimates that R$18,000 of these receivables will become uncollectible.
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Prepare the journal entry to record the estimated uncollectibles. (Assume an unadjusted balance of zero in Allowance for Doubtful Accounts.)
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Prepare the current assets section of the statement of financial position for Fertig Retail, assuming that in addition to the receivables it has cash of R$90,000, merchandise inventory of R$180,000, and supplies of R$13,000.
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Calculate the accounts receivable turnover and average collection period. Assume that average net accounts receivable were R$300,000. Explain what these measures tell us.
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