Please help me with the fields marked red. I messed up somewhere in my calculations and I cannot figure out where.
Allowance Method for Accounting for Bad Debts At the beginning of 2017, EZ Tech Company's Accounts Receivable balance was $234,000, and the balance in Allowance for Doubtful Accounts was $4,000. EZ Tech's sales in 2017 were $1,760,000, 80% of which were on credit. Collections on account during the year were $1,120,000. The company wrote off $7,000 of uncollectible accounts during the year. Required: 1. Identify and analyze the sales during 2017. Activity Operating Accounts Cash Increase, Accounts Receivable Increase, Sales Revenue Increase Statement(s) Balance Sheet and Income Statement Foodback How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income Cash 352,000 No Entry 0 1,760,000 x 1,760,000 No Entry o 1,760,000 x Sales Revenue No Entry Accounts Receivable 1,408,000 No Entry 0 0 No Entry 0 0 Foodback Identify and analyze the transactions related to the collections of cash during 2017. Activity Operating Accounts Cash Increase, Accounts Receivable Decrease Statement(s) Balance Sheet only Foodback How does this entry affect the accounting equation? Ir a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Net Stockholders' Equity Assets Liabilities Revenues Expenses Income Cash 1,120,000 No Entry 0 o No Entry ol No Entry 0 0 Accounts Receivable -1,120,000 No Entry 0 0 No Entry o No Entry 0 Foodback Identify and analyze the transactions related to the write-offs of accounts receivable during 2017. Activity Operating Accounts Allowance for Doubtful Accounts Decrease, Accounts Receivable Decrease Statement(s) Balance Sheet only Feedback How does this entry affect the accounting equation? Ir a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Ir a contra account is decreased, it will have the effect of increasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets Liabilities Equity Revenues Expenses Income Allowance for Doubtful Accounts 7,000 No Entry 0 0 No Entry 0 No Entry o 0 Accounts Receivable -7,000 No Entry 0 0 No Entry o No Entry o ol Foodback 2. Identify and analyze the adjustments to recognize bad debts assuming that (a) bad debts expense is 4% of credit sales and (b) amounts expected to be uncollectible are 5% of the year-end accounts receivable. a. Identify and analyze the adjustments to recognize bad debts assuming that bad debts expense is 4% of credit sales. Activity Operating Accounts Allowance for Doubtful Accounts Increase, Bad Debts Expense Increase Balance Sheet and Income Statement Statement(s) Foodhack How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. If a contra account is decreased, it will have the effect of increasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets Liabilities Equity Revenues Expenses Income Allowance for Doubtful Accounts 28,160 x No Entry 0 28,160 X No Entry X ox Bad Debts Expense X 28,160 x -28,160 x Foodback b. Identify and analyze the adjustments to recognize bad debts assuming that amounts expected to be uncollectible are 6% of the year-end accounts receivable. Activity Operating Accounts Allowance for Doubtful Accounts Increase, Bad Debts Expense Increase Balance Sheet and Income Statement Statement(s) Food How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. If a contra account is decreased, it will have the effect of increasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets Liabilities Equity Revenues Expenses Income Allowance for Doubtful Accounts -39,050 x No Entry 0 -39,050 x No Entry 07 Bad Debts Expense 39,050 x -39,050 x How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect or decreasing the corresponding financial statement item. Ir a contra account is decreased, it will have the effect of increasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets Liabilities Equity Revenues Expenses Income Allowance for Doubtful Accounts 28,160 x No Entry 0 28,160 x No Entry X 0 x Bad Debts Expense X 28,160 x -28,160 x Feedback b. Identify and analyze the adjustments to recognize bad debts assuming that amounts expected to be uncollectible are 6% of the year-end accounts receivable. Activity Operating Accounts Allowance for Doubtful Accounts Increase, Bad Debts Expense Increase Statement(s) Balance Sheet and Income Statement Foodback How does this entry affect the accounting equation? Ir a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect or decreasing the corresponding financial statement item. Ir a contra account is decreased, it will have the effect of increasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets Liabilities Equity Revenues Expenses Income Allowance for Doubtful Accounts -39,050 x No Entry 0 -39,050 x No Entry 0 Bad Debts Expense 39,050 x -39,050 x Foodback 3. What is the net realizable value of accounts receivable on December 31, 2017, under each assumption in part (2)? Using the percentage of sales approach, the net realizable value of the receivables is? 478,950 x Using the percentage of year-end receivables approach, the net realizable value of the receivables is? 489,840 x 4. The recognition of bad debts expense reduces the net realizable value by the amount recorded in bad debts expense and the allowance for doubtful accounts. The write-off of accounts reduces X the net realizable value
