PQ$7-1$

The following summary business activities were recorded in the third year of operations for Magenta Inc., a merchandising business in Ontario. Their yearend was December $31,$ Year $3.$ Record each of the business activities in the expanded accounting equation using account names.

Answer the questions that follow the chart.

Trans. # Description Amount

Opening Balances Accounts receivable, $$148,570,$

Allowance for Doubtful Accounts, $$-17,800.$

$1.$ Total sales during the year. Terms are n$/35.$ $$962,734$

$2.$ Products are returned by customers due to errors in shipping quantities or type of products. $$35,621$

$3.$ Cash collections of accounts receivable. $$914,594$

$4.$ Write off of accounts receivables that are determined to be uncollectable.

$$24,158$

$5.$ Two customers who were previously written off send in a cheque. $$7,525$

$6.$ The business estimates the uncollectable accounts receivable using the aging schedule, provided below.

$-$

Category Amount Estimated Uncollectable Estimated Allowance for Doubtful Accounts

Current $60,5001\%$

$1-30$ days overdue $34,7405\%$

$31-60$ days overdue $19,60016\%$

$61-90$ days overdue $14,85030\%$

Over $90$ days overdue $7,24055\%$

Total $136,930$