Okay Optical, Inc., (OOI) began operations in January 2013, selling inexpensive sunglasses to large retailers like Walgreens and other smaller stores. Assume the following transactions occurred during its first six months of operations.

January 1

Sold merchandise to Walgreens for $27,000; the cost of these goods to OOI was $18,300.

February 12

Received payment in full from Walgreens.

March 1

Sold merchandise to Bravis Pharmaco on account for $3,700; the cost of these goods to OOI was $1,750.

April 1

Sold merchandise to Tonys Pharmacy on account for $8,700. The cost to OOI was $4,750.

May 1

Sold merchandise to Anjuli Stores on account for $2,700; the cost to OOI was $1,550.

June 17

Received $6,850 on account from Tonys Pharmacy.

Required:

Complete the following aged listing of customer accounts at June 30.

Customer	Total Balance	June	May	April	Greater than
		(One Month)	(Two Months)	(Three Months)	Three Months
Anjuli Stores	$2,700		$2,700
Bravis Pharmaco	3,700				3,700
Tonys Pharmacy
Walgreens
Total

2.

Estimate the Allowance for Doubtful Accounts required at June 30, 2013, assuming the following uncollectible rates: one month, 2 percent; two months, 6 percent; three months, 20 percent; more than three months, 35 percent.

Estimated Uncollectible
One Month
Two Months
Three Months
More than Three Months
Total

3-a.

Show how OOI would report its accounts receivable on its June 30 balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

OKAY OPTICAL, INC.
Balance Sheet (partial)
At June 30, 2013
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable, Net of Allowance

What amounts would be reported on an income statement prepared for the six-month period ended June 30, 2013?

OKAY OPTICAL, INC.
Income Statement (partial)
For the Six Months Ended June 30, 2013
Income from Operations