II. Idaho Greenhousery - A Comprehensive Problem on Accounts Receivable (Total 16 points) The fimm policy of Idaho Greenhousery is to make all the adjustments to its "Allowance for Sales Retums (i.e., A.S.R)" and "Allowance for Doubtful Accounts (i.e., A.D.A)" on a quarterly basis. Firm experience indicates that sales returns are approximately 10% of all credit sales in any given quarter. In addition, the firm uses the balance sheet approach for estimating its Allowance for Doubt Accounts, and the estimation is 6% of the accounts receivable balance at the end of the quarter. Below are the figures you have been provided. Activities and Accounts Begin of Otr 1 End of Otr1 Accounts Receivable Debit Balance of 900 Allowance for Doubtful Accounts (A.D.A) Credit Balance of 54 Allowance for Sales Retums (A.S.R) Credit Balance of 200 (a) Credit Sales for the quarter 1,600 (b) Collections of Accounts Receivables in Cash 1,200 (c) Actual Sales Retums 250 (d) Actual Write-offs of Bad debts 40 10 (e) Collections on Accounts Receivables that are previously written off Assumption: The adjustments for ASR and ADA are the last entries made during the quarter Hint: Using T-Accounts of Accounts Receivable, A.D.A and A.S.R. to track the number changes Requirements: Based on just the data above, at the end of Qtr 1, 1) What are the journal entries for transactions (a)-(e)? 2) What are the adjusting entries for A.S.R and A.D.A at the end of Qtr 1? 1) What are the journal entries for transactions (n) -(e) (10 points)? (a) (b) (c) (d) (e) Hint: no steps here (2) What are the adjusting entries for A.S.R and A.D.A at the end of Qtr 1 (6 points)? 7