Homework: Chapter 8 Problem Set Save Score: 0 of 10 pts 1 of 1 (0 complete) HW Score: 0%, 0 of 10 pts CP8-43 (similar to) Question Help 0 Wicked Wild Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers renting canoes and purchasing T-shirts. Many of these customers are asking for credit terms. Alice and Zion Wilson, stockholders and company managers, have decided it is time to review their business transactions and update some of their business practices. Their first step is to make decisions about handling accounts receivable. So far, year to date credit sales have been $22,000. A review of outstanding receivables resulted in the following aging schedule: B Click the icon to view the aging schedule.) Read the requirements Requirement 1. The company wants to use the allowance method to estimate bad debts. Assume a zero beginning balance for Allowance for Bad Debts. a. Determine the estimated bad debts expense under the percent-of-sales methods at June 30, 2019. Assume that 2% of credit sales will not be collected. (Round to the nearest dollar.) Method Estimated Bad Debts a. Percent-of-sales A Requirements 1. The company wants to use the allowance method to estimate bad debts. Determine the estimated bad debts expense under the following methods at June 30, 2019. Assume a zero beginning balance for Allowance for Bad Debts. Round to the nearest dollar. a. Percent-of-sales method, assuming 2% of credit sales will not be collected. b. Percent-of-receivables method, assuming 22% of receivables will not be collected. c. Aging-of-receivables method, assuming 5% of invoices 1-30 days will not be collected, 25% of invoices 31-60 days, 35% of invoices 61-90 days, and 40% of invoices over 90 days. 2. Journalize the entry at June 30, 2019, to adjust for bad debts expense using the percent-of-sales method. 3. Journalize the entry at June 30, 2019, to record the write-off of the Dawn Daycare invoice. 4. At June 30, 2019, T-accounts for Accounts Receivable and Allowance for Bad Debts before Requirements 2 and 3 have been opened for you. Post entries from Requirements 2 and 3 to those accounts. Assume a zero beginning balance for Allowance for Bad Debts. 5. Show how Wicked Wild Company will report net accounts receivable on the balance sheet on June 30, 2019. Print Done X Data Table $ 1,300 Customer Name Little Lion's Club Tee Party Dawn Daycare Bayside Pavilion Golden Years Center North Yacht Club Oak Shirts Zane's Marina Total Age of Accounts as of June 30, 2019 1-30 31-60 61-90 Over 90 Total Days Days Days Days Balance $ 500 $ 500 1,100 $ 200 $ 400 400 600 600 1,200 1,200 1,000 1,000 1,100 700 1,800 800 800 800 2,400 $ 5,100 $ 1,700 $ 2,000 $ 400 $ 9,200 Print Done