Since it sells on credit, the company cannot expect to collect 100% of its accounts receivable. At October 31, 2018, and 2019, respectively, Speedy Mail reported the following on its balance sheet (in millions of dollars): October 31, 2019 2018 Accounts receivable... $ 4,500 $ 3,400 Less: Allowance for uncollectible accounts (100) (220) Accounts receivable, net... $ 4,400 $ 3,180 During the year ended October 31, 2019, Speedy Mail earned service revenue and collected cash from customers. Assume uncollectible-account expense for the year was 4% of service revenue on account and that Speedy Mail wrote off uncollectible receivables and made other adjustments as necessary. 1. Journalize the following transactions of Speedy Mail for the year ended October 31, 2019 (explanations are not required): a. Service revenue was $30,000 million, of which 11% is cash and the remainder is on account b. Collections from customers on account were $23,654 million. c. Uncollectible-account expense was 4% of service revenue on account. d. Write-offs of uncollectible accounts receivable were $1,188 million. e. On October 1, Speedy Mail received a 2-month, 3%, $800 million note receivable from a large corporate customer in exchange for the customer's past due account; Speedy Mail made the proper year-end adjusting entry for the interest on this note. f. Speedy Mail's October 31, 2019, year-end bank statement reported $42 million of non-sufficient (NSF) checks from customers. 2. T-accounts for Accounts Receivable and Allowance for Uncollectible Accounts have been At year-end, Speedy Mail ended with the foregoing October 31, 2019, balances. Speedy Mail Corporation is an overnight shipper. (Click the icon to view additional information.) Read the fequirements Requirement 1. Journalize the following transactions of Speedy Mail for the year ended October 31, 2019 (explanations are not required). (Record debits first, then credits. Exclude explanations from any journal entries. Enter amounts in millions as provided to you in the problem statement.) a. Service revenue was $30,000 million, of which 11% is cash and the remainder is on account. Journal Entry Date Accounts Debit Credit a b. Collections from customers on account were $23,654 million. Journal Entry Date Accounts Debit Credit b c. Uncollectible-account expense was 4% of service revenue on account. (Round your answer to the nearest million.) Journal Entry Date Accounts Debit Credit d. Write-offs of uncollectible accounts receivable were $1,188 million. Journal Entry Date Accounts Debit Credit d e. On October 1, Speedy Mail received a 2-month, 3%, $800 million note receivable from a large corporate customer in exchange for the customer's past due account; Speedy Mail made the proper year-end adjusting entry for the interest on this note. First record the note in exchange for the past due account. (Do not record the interest accrual, we will do that in the next step.) Journal Entry Date Accounts Debit Credit e Now record the year-end adjusting entry for the interest on the note. (Round your answer to the nearest million.) Journal Entry Date Accounts Debit Credit e f. Speedy Mail's October 31, 2019, year-end bank statement reported $42 million of non-sufficient (NSF) checks from customers. Journal Entry Date Accounts Debit Credit f Requirements 2 and 3. T-accounts for Accounts Receivable and Allowance for Uncollectible Accounts have been opened. Insert the October 31, 2018, balances as given. Post your entries to the Accounts Receivable and Allowance for Uncollectible Accounts T-accounts. Compute the ending balances for Accounts Receivable and the Allowance for Uncollectible Accounts and compare your balances to the actual October 31, 2019, amounts. They should be the same. How much does Speedy Mail expect to collect from its customers after October 31, 2019? (Enter amounts in millions as provided to you in the problem statement.) Allowance for Accounts Receivable Uncollectible Accounts Speedy Mail expects to collect $ million from its credit customers after October 31, 2019. Requirement 4. Show the net effect of these transactions on Speedy Mail's net income for the year ended October 31, 2019. (Enter amounts in millions as provided to you in the problem statement. If a box is not used in the table, leave the box empty; do not select a label or enter a zero. Use parentheses or a minus sign for expenses.) Net effect on net income
