Happy Camper Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers renting canoes and purchasing T-shirts. Many of these customers are asking for credit terms. Amy Wilson, owner and company manager, has decided it is time to review the business transactions and update some of the business practices. Her first step is to make decisions about handling accounts receivable. So far, year to date credit sales have been $18,000. A review of outstanding receivables resulted in the following aging schedule: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. The company wants to use the allowance method to estimate bad debts. Assume a zero beginning balance for Allowance for Bad Debts. a. Determine the estimated bad debts expense under the percent-of-sales methods at June 30, 2019. Assume that 7% of credit sales will not be collected. (Round to the nearest dollar.) a. Method Percent-of-sales Estimated Bad Debts b. Determine the estimated bad debts expense under the percent-of-receivables methods at June 30, 2019. Assume that 20% of receivables will not be collected. (Round to the nearest dollar.) Method Estimated Bad Debts b. Percent-of-receivables c. Determine the estimated bad debts expense under the aging-of-receivables methods at June 30, 2019. Assume that 15% of invoices 1-30 days will not be collected, 25% of invoices 31-60 days, 35% of invoices 61-90 days, and 70% of invoices over 90 days. (Round intermediary computations and your final answer to the nearest dollar.) Method c. Aging-of-receivables Estimated Bad Debts Requirement 2. Journalize the entry at June 30, 2019, to adjust for bad debts expense using the percent-of-sales method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Jun. 30 Accounts and Explanation Debit Credit Happy Camper Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers renting canoes and purchasing T-shirts. Many of these customers are asking for credit terms. Amy Wilson, owner and company manager, has decided it is time to review the business transactions and update some of the business practices. Her first step is to make decisions about handling accounts receivable. So far, year to date credit sales have been $18,000. A review of outstanding receivables resulted in the following aging schedule: (Click the icon to view the aging schedule.) Read the requirements. makes up the entire Sunrise Daycare receivable balance. Continue to assume that the percent-of-sales method is in use.) Date Jun. 30 Accounts and Explanation Debit Credit Requirement 4. At June 30, 2019, T-accounts for Accounts Receivable and Allowance for Bad Debts before Requirements 2 and 3 have been opened for you. Post entries from Requirements 2 and 3 to those accounts. Assume a zero beginning balance for Allowance for Bad Debts. For each account, enter the balance, "Bal.", prior to the Jun. 30 entries on the first line of the T-account. Post the two Jun. 30 entries, using "Jun. 30" posting references, on the second lines of the T-accounts. Use the final line of the T-accounts to enter the adjusted balances, along with a "Bal." reference. (If an account has a zero balance, select the "Bal." reference and enter "0" on the appropriate side of the T-account.) Accounts Receivable Allowance for Bad Debts Requirement 5. Show how Happy Camper Company will report net accounts receivable on the balance sheet on June 30, 2019. (Continue to assume that the percent-of-sales method is in use and that the entries from Requirements 2 and 3 have been posted to the ledger.) Balance Sheet (Partial): Current Assets: Age of Accounts as of June 30, 2019 1-30 31-60 61-90 Over 90 Customer Name Days Days Days Days Total Balance Little Lion's Club $ 800 $ 800 Tee Cup 800 $ 1,000 1,800 Sunrise Daycare $ 400 400 Pavilion Pond 900 900 Eagle Center 600 600 South Bay Club 300 300 Oak Shirts 700 1,000 1,700 1,000 1,000 1,000 3,000 Zin's Marina $ 4,500 $ 3,000 $1,600 $ 400 $ 9,500 Total Print Done