Olivita Inc. is a merchandising business that sells to retail stores all over Canada, owned by Olive

Vitanni. This is its $4$th year of operations and, due to rapid expansion, Olive is concerned about

the accounts receivable balance at year$-$end. In order to grow the business, all customers have

been offered credit terms of $3/10,$ n$/45,$ which Olive believes results in faster payment of the

outstanding accounts receivable. She also believes that it creates higher sales because only her

business is offering such favourable $($good$)$ credit terms. At December $31,$ Year $1,$ the current

year$-$end, Olive has the following information about the activities during Year $1$:

Accounts receivable at January $1,$ Year $1$ $$133,000$

Allowance for doubtful accounts at January $1,$ Year $1-$$$15,960$

Total gross credit sales during Year $1($there were no cash sales$)$ $$984,750$

Cash collected on receivables during the year $($net of discounts below$)$ $$925,475$

Cost of goods sold during Year $1$ $$541,620$

Write$-$offs during Year $1$ $$18,490$

Sales returns $($sales & cost of goods sold respectively$)$ $$17,200,$ $$9,460$

Sales discounts $$17,085$

Do all the required entries for Year $1$ EXCEPT the estimate for the uncollectable accounts. $($The

chart is provided for you. NOTE: you have been provided with account names but you will NOT

be provided with the account names for the final exam!$)$

If Olive used $12\%$ of total accounts receivable as her estimate of uncollectable accounts, what

would her estimated uncollectable accounts be$?$

Estimated uncollectable accounts:

Calculations: