Question D: Accounting for Receivables (14 marks; 29 minutes)

Graphix Corp. performs graphic design services including designing and maintaining web sites. It also imprints logos on paper and envelopes. The following activities occurred during 2022:

Nov. 1 Graphix delivered a new logo to CP Brokers and submitted an invoice for $2,000 with terms 2/10, n/30.

Nov. 15 Graphix delivered an overall web concept to Fargas Inc., which Fargas approved. Graphix submitted an invoice for $1,000 with terms 2/10, n/30.

Nov. 20 Graphix delivered paper and envelopes incorporating the new logo to CP Brokers and submitted an invoice for $200.

Nov. 22 Graphix receives from Fargas Inc. the amount due for the new web concept.

Nov. 25. The customer CP Brokers complained that the printing on much of the paper and envelopes is unacceptable. Graphix offers to reduce the invoice amount from $200 to $75. CP Brokers accepted the offer.

Nov. 29 CP Brokers paid the amount due for the new logo delivered on November 1, and the amount owed for the paper and envelopes.

Dec. 1 Graphix installed a new website for Healthy Foods Inc. Healthy Foods signed a note to pay $20,000 plus interest at a rate of 6% on June 1, 2023.

Dec. 15 Graphix wrote off an account receivable for $600. The amount was owed by a customer who declared bankruptcy.

Dec. 31 After performing an aging of its accounts receivable, Graphix estimates that 3% of its ending balance of accounts receivable of $600,000 will be uncollectible in the future. The Allowance for Doubtful Accounts had a credit balance of $300 at November 1, 2022.

Required:

Record the activities that occurred in 2022 on these specific dates only: November 1, November 22, November 25, and November 29. Use the basic accounting equation format (A = L + SE) to record the transactions. (5.5 marks)

Record the necessary adjusting entries at December 31, 2022, using the accounting equation format (A=L+SE). (4 marks)

Determine the net realizable value of Graphixs accounts receivable at December 31, 2022. (1.5 marks)

Record the receipt of cash from Healthy Foods Inc. on June 1, 2023, using the accounting equation format (A=L+SE). (3 marks)

NB: explain how you got each answer especially for the interest payable.

thank you.