Evaluate the fol- lowing scenarios, assuming both companies use the net credit sales as the basis for estimating bad debts expense:

1. At year end, Bonnie Company has accounts receivable of $112,000. The allowance for uncollectible accounts has a balance prior to adjustment of $(400). In other words, there were fewer specific write-offs than estimated, leaving an excess in the allowance account. Net credit sales for the year were $315,000 and 3% is estimated to be uncollectible.

2. At year end, Clyde Company has accounts receivable of $220,000. The allowance for uncollectible accounts has a balance prior to adjustment of $200. In other words, more specific accounts were written off than estimated, so the allowance was short by $200. Net credit sales for the year were $1,525,000 and 1% is estimated to be uncollectible.

Requirements

For each situation, compute the following:

1. Thebaddebtsexpensefortheyear

2. Thebalanceintheallowanceforuncollectibleaccountsaccountatyearend

3. Thenetrealizablevalueofaccountsreceivableatyearend

4. Assuming Bonnie Company had an accounts receivable (net) balance of $105,000 at the beginning of the year, what is Bonnies

   accounts receivable turnover ratio for the year?

5. Assuming Clyde Company had an accounts receivable (net) balance of $226,000 at the beginning of the year, what is Clydes

accounts receivable turnover ratio for the year?

Evaluate the following scenarios, assuming both companies use the accounts recelvable method of estimating bad debts expense: (Click the icon to view the scenarios.) For each situation, compute the following: (Click the icon to view the requirements. Current period bad debts expense Requirement 2. Scenerio a. Compute the balance in the allowance for uncollectible accounts account at year end. (Enter a contra account balance as a negative amount.) The balance the allowance for uncollectible accounts at year end is S Requirement 3. Scenerio a. Compute the net realizable value faccounts receivable vear end. Becin by selecting the formula used calculate the net realizable value (NRV). Then enter the amounts to calculate the NRV at year end. Some of the account names will be abbreviated. (Enter amounts as positive numbers.) NRV of acoounts receivable Requirement 1. Scenerio b. Compute the bad debts expense for eyear. Begin by selecting the formula used to calculate bad debt expense using the accounts reeceivable method. Then enter the amounts to calculate the bad debt expense for the year. Some of the account names will be abbreviated. (Enter amounts as positive numbers. Current period bad debts expense Requirement 2. Scenerio b. Compute the balance in the allowance for uncollectible accounts account at vear end. (Enter a contra account balance as a negative amount.) the allowance for uncollectible accounts The balance vear end is s The balance in the allowance for uncollectible accounts at year end is S. Requirement 3. Scenerio b. Compute the net realizable value of accounts receivable at year end. year end. Some of the account names will be abbreviated. (Enter amounts as positive numbers.) Begin by selecting the formula used to calculate the net realizable value (NRV). Then enter the amounts to calculate the NRV NRV accounts receivable Requirement 4. Based solely on the data provided, how many days does it take each company collect its receivables, and which company is doing a better job of collecting its receivables? Explain your answer. calculate the number of days it takes each company to collect each company In order receivables, we first need to calculate the accounts receivable turnover ratio Begin by selecting the formula used to calculate accounts receivable turnover. Then enter the amounts to calculate the accounts receivable turnover ratio for each company listed. Some of the account names will be abbreviated. (Round your two decimal places.) answer Accounts receivable turnover ratio Tate Company Bradley Company Based on the accounts receivable turnover ratios calculated in the previous step, we can now calculate the number of days it takes each company to collect its receivables, (Round vour answer to the nearest whole number.) days to collect i days to collect its roceivables receivables It takes Tate Company It takes Bradley Company