> C O File C:/Users/100295135/Downloads/Test%2010%20a.m.pdf UongoUOTT TO YOU Required: Prepare the required journal entry(ies) for Alpha. Question 3 (10 marks) You are preparing the December 31, Year 2, financial statements. Required a. (5 marks) Your analysis of accounts receivable indicates the following for Year 2: Accounts receivable - January $ 175,000 Allowance for doubtful accounts - January 1 17,500 Credit sales during the year 600,000 Cash collections during the year 575,000 Your analysis of the aged accounts receivable at the year indicates: 1. A key customer, Alpha, went bankrupt during the year, and there will be no further collections on this account receivable of $10,000. 2. After accounting for the Alpha receivable, an aging of the remaining accounts receivable at the end of the year indicated that an allowance for doubtful accounts of $32,500 is required as of December 31, Year 2 for other customers. Prepare the Year 2 journal entries required to (i) write-off the Alpha account receivable and to (ii) record bad debts expense (include your calculation). b. (5 marks) Your analysis of inventory indicates that Year 1 ending inventory was understated by $30,000 due to a counting error. Inventory at the end of Year 2 was correqily calculated. Indicate the effect of the error (if any) on each of the following, indicating whether overstated, understated, or not affected and provide the amount. Year 1 net income Year 1 cost of goods sold 1) December 31, Year 2 retained earnings acer