Sunrise Products has 250 accounts receivable accounts. All accounts are due in 30 days. On June 30, an ageing schedule was prepared. The results are summarized below: Total Not Yet Due 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Amounts $345 250 $183 590 $94 680 $43 340 $9 000 $14 640 Two accounts receivable were accidentally omitted from this schedule. The following data is available regarding these accounts: R. Jones owes $4 250 from two invoices: Invoice no. 218, dated March 14, in the amount of $2 980; and Invoice no. 568, dated May 9, in the amount of $1 270. F. Smith owes $3 760 from two invoices: Invoice no. 574, dated May 19, in the amount of $1 350: and Invoice no. 641, dated June 5, in the amount of $2 410. a) Complete the ageing chart as of June 30 by adding to the column subtotals an ageing of the accounts of Jones and Smith. b) Calculate the estimated portion of each age group that will prove uncollectible and the required balance in the Allowance for Doubtful Accounts. The following percentages of each age group are estimated to be uncollectible: Not yet due, 1%; 1-30 days, 4%; 31-60 days, 10%; 61-90 days, 30%; over 90 days, 50%. c) Prepare the journal entry to adjust the Allowance for Doubtful Accounts account at June 30. Prior to making this adjustment, the account has a credit balance of $13 800. 5. Noodle Hut Restaurant The Noodl Journalize the following three transectione 5. Noodle Hut Restaurant The Noodle Hut restaurant does a brisk business. Journalize the following three transactions from their lunchtime crowd on May 16, 2015. The following service fees apply: $0.15 per transaction for debit card; 2.5% for MasterCard and Visa; 3.5% for American Express. a) A lunch bill for $34.00 was paid with a debit card. b) A lunch bill for $25.00 was paid with a MasterCard. c) A lunch bill for $55.00 was paid with an American Express. 6. Ranjeet Jewellers Ranjeet Jewellers is a jewellery wholesaler. They mostly sell to retailers. Joe's Fine Jewellery has an outstanding account with Ranjeet Jewellers for $9 750 that is several months past due. On April 1, Ranjeet Jewellers accepts a promissory note for the total amount with 5% annual interest for a term of three months ending June 30, 2015. Record the following independent journal entries: a) The journal entry to record the acceptance of the note by Ranjeet Jewellers. b) The journal entry to record the receipt of payment of the note, plus interest on June 30, 2015. c) The journal entry to record the failure of Joe's Fine Jewellery to pay their note on July 1, 2015. PART B - Short Answer Answer all questions in full sentences. 1. What factors must a company consider when choosing an amortization method to use for a fixed asset? Be sure to refer to GAAP and the effect of the decision on the financial statements. 2. Why do companies choose to accept credit and debit cards as forms of payment? Outline the pros and cons of this business decision. 3. Explain how the matching principle relates to uncollectible accounts receivable. How do companies satisfy the matching principle in this area of accounting? 4. Outline the reasons a company records a note receivable on its balance sheet. What benefits does a company get from issuing this promissory note? 5. What is the Capital Cost Allowance and how does it affect the amortization of assets? Sunrise Products Aging of Accounts Receivable Total As of June 30 Amounts General Journal Date Particulars Debit Page Credit Not Yet 1-30 Due days 31-60 61-90 Over 90 days days days past due past due past due past due Allowance for Doubtful Accounts Noodle Hut Restaurant Date a) General Journal Page Particulars Debit Credit Ranjeet Jewellers General Journal Page Date a) Particulars Debit Credit b) c)