QUESTION 3 (25 marks; 45 minutes): Accounting for Receivables and Bad Debts Expense This question consists of two independent parts, Part A and Part B. PART A The sales of Pins Company in 2013, its rst year of operations, were $700,000, all on account. Cash collections totaled $500,000. Pins also wrote-off accounts in the amount of $8,000. At the end of the scal year, December 31, 2013, Pins increased the allowance for doubtful accounts by $14,000. The unadjusted balance of selected accounts at December 31 2014, are as follows: Accounts Receivable (Dr.) ............................................... $300,000 Allowance for Doubtful Accounts (% ............................... 10,000 Sales Revenue (on credit) (CL) .......................................... 800,000 On December 31, 2014, Pins carried out an aging of its accounts receivable and estimated that the 2014 ending balance of accounts receivable contained $11,000 of probable uncollectible accounts. It made an adjusting entry appropriate for this estimate. Required: Prepare the journal entries to record all the transactions during 2013. (4 marks) Prepare the journal entry to record the bad debt expense for 2014. (2 marks) Prepare the journal entry to record the write-off during 2014. (2 marks) What were total cash collections from customers in 2014? (2 marks) Working capital is dened as current assets minus current liabilities. a. How would Pins's working capital be affected by the write-off of $8,000 in uncollectible accounts during 2013? b. What impact did the recording of bad debt expense have on working capital in year 2013? Be as specic as possible in your answers. (5 marks) 9:59P