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QUESTION 8 Bella's Art Co. had $ 67,000 of sales on credit during 2019. The company had a beginning balance in Accounts Receivable (i.e., on
QUESTION 8 Bella's Art Co. had $ 67,000 of sales on credit during 2019. The company had a beginning balance in Accounts Receivable (i.e., on January 1, 2019) of $14,000. The company also had a beginning balance in the Allowance for Bad Debts of $1,000. During 2019, the company collected $62,000 from credit customers, and they wrote off no customer account receivable balances during 2019. The following schedule is pertinent for the aging of Bella's Art Co.'s receivables at year- end: Age Amount Expectation of Collecting Less than 30 days $8,000 95% 30-45 days $5,000 80% 45-60 days $4,000 70% Over 60 days $2,000 50% Part A (13 points): What is the adjusting entry that Bella's Art Co. made at year-end related to bad debts? Show your calculations (i.e., each piece). Part B (11 points): Would your answer to Part A change if I told you that Bella's Art Co. wrote off $500 of customer account receivable balances during the year (i.e., because they determined specific customers were never going to pay)? The account balances written off were over one year old. Explain clearly your reasoning for answering yes or no to this question. If you answer "yes," indicate (1) which specific accounts would be affected by this change in scenario and how they would be affected and (2) how the entry you recorded in Part A would change
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