P5.6 (Algo) Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios L05.3, 5-4 Icekreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between Aprit 1 and June 30 of the current year: Apcil 10 Received an onder fron Peter's Appliances, a wholesaler, for 10 nachines. April 30 seld 15 machines to Vuri Inc, on credit. May 1 The purchasing manager of Peter's Appliances visited Icekrete's factory and purchased 12 machines on credit, instead of the 10 machines that were previcinly ordered. May 5 Yuri Inc, paid for the machines purchased on Apeil 30. May 7 sold 2 achines to cherg ltd. on eredit. May 10 Wrote off $13,200 of accounts receivable that were considered uncollectible. These receivables relate to sales nade prior to Aprid 1 of the current year. Hay 10 Peter's Appliances pald the amount due to Icekrese. June 30 Mecovered $3,60 e from the recelvables that were iritten off on May 10. Additional information is as follows: - teekreme sold alt machines at $16,000 per unit - All of IceKreme's sales were on credit with terms n/30 - Icekreme's records included the following items and their balances as at March 31 of the current year: 2. The company uses the aging of accounts receivable method to determine the amount of bad debt expense. The estimated uncollectible rates for the various age groups are as follows: (Hint Use a timeline to keep track of accounts recelvable in order to determine the age of these recelvables.) a. Determine the amount of receivables that may not be collectible in the future as on June 30 of the current year. b. Prepore the journal entry to record bad debt expense at June 30 of the current year, the company's fiscal year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) P5.6 (Algo) Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios L05.3, 5-4 Icekreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between Aprit 1 and June 30 of the current year: Apcil 10 Received an onder fron Peter's Appliances, a wholesaler, for 10 nachines. April 30 seld 15 machines to Vuri Inc, on credit. May 1 The purchasing manager of Peter's Appliances visited Icekrete's factory and purchased 12 machines on credit, instead of the 10 machines that were previcinly ordered. May 5 Yuri Inc, paid for the machines purchased on Apeil 30. May 7 sold 2 achines to cherg ltd. on eredit. May 10 Wrote off $13,200 of accounts receivable that were considered uncollectible. These receivables relate to sales nade prior to Aprid 1 of the current year. Hay 10 Peter's Appliances pald the amount due to Icekrese. June 30 Mecovered $3,60 e from the recelvables that were iritten off on May 10. Additional information is as follows: - teekreme sold alt machines at $16,000 per unit - All of IceKreme's sales were on credit with terms n/30 - Icekreme's records included the following items and their balances as at March 31 of the current year: 2. The company uses the aging of accounts receivable method to determine the amount of bad debt expense. The estimated uncollectible rates for the various age groups are as follows: (Hint Use a timeline to keep track of accounts recelvable in order to determine the age of these recelvables.) a. Determine the amount of receivables that may not be collectible in the future as on June 30 of the current year. b. Prepore the journal entry to record bad debt expense at June 30 of the current year, the company's fiscal year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: 1. Prepare the journal entries to record the transactions that occurred from April 1 to June 30 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3. IceKreme's net accounts receivable were $80,000 at June 30 of the prior year. Calculate IceKreme's average collection period for the current fiscal year (Use 365 days a year, Round intermediate calculations to 2 decimal places. Round the finat answer to 1 decimal place.)
