During the first year of operation, Year 1, McGinnis Appliance recognized $340,000 of service revenue on account. At the end of Year 1, the accounts receivable balance was $66,836. Even though this is his first year in business, the owner believes he will collect all but about 6 percent of the ending balance. Required a. What amount of cash was collected by McGinnis during Year 1? b. Assuming the use of an allowance system to account for uncollectible accounts, what amount should McGinnis record as uncollectible accounts expense in Year 1? c. What is the net realizable value of receivables at the end of Year 1? d. Show the effect of these transactions on the financial statements by recording the appropriate amounts in a horizontal statements model like the one shown here. When you record amounts in the Cash Flow column indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If element is not affected by the event, leave the cell blank Complete this question by entering your answers in the tabs below. Req AtoC Reg D Show the effect of these transactions on the financial statements by recording the appropriate amounts in a horizontal statements model like the you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), Investing activity (IA), or financing activity affected by the event, leave the cell blank. (Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will requir MCOINNIS APPLIANCE Accounting Equation for the Year 1 Income Statement Assets Complete this question by entering your answers in the tabs below. Req A to C Reg D a. What amount of cash was collected by McGinnis during Year 1? b. Assuming the use of an allowance system to account for uncollectible account uncollectible accounts expense in Year 1? (Round your final answer to nearest w c. What is the net realizable value of receivables at the end of Year 1? (Do not re final answer to nearest whole dollar amount.) A. Cash collected B. Uncollectible accounts expense C. Net realizable value Bar ReqD> Complete this question by entering your answers in the tabs below. Req A to C Reg D a. What amount of cash was collected by McGinnis during Year 1? b. Assuming the use of an allowance system to account for uncollectible account uncollectible accounts expense in Year 1? (Round your final answer to nearest w c. What is the net realizable value of receivables at the end of Year 1? (Do not re final answer to nearest whole dollar amount.) A. Cash collected B. Uncollectible accounts expense C. Net realizable value Bar ReqD> Complete this question by entering your answers in the tabs below. Reg A to C Read Show the effect of these transactions on the financial statements by recording the appropriate amounts in a horizontal statements you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), Investing activity (IA), or fin affected by the event, leave the cell blank. (Enter any decreases to account balances and cash outflows with a minus sign. Not all MCGINNIS APPLIANCE Accounting Equation for the Year 1 Income Statement Liabilities Equity Revenue Expense = Net Income Event No. Assets NRV Accounts Receivable Statement of Cash Flow Cash 1. 2 III 3 Req A to C
