Use the following to answer questions 1 5

For the next few weeks CJM Ad Agency is offering a 20% trade discount when providing advertising services of $50,000 or more to its customers to encourage customers to buy more advertising. The Agency also offers 2/10, n30 on all credit sales. All credit sales are invoiced at the end of the month. The Agency provided the following services this month; amounts are shown before trade discounts have been deducted:

Designs a $30,000 ad campaign for Customer A on account pays within 10 days Designs a $50,000 ad campaign for Customer B on account pays within 10 days Designs a $50,000 ad campaign for Customer C on account pays within 30 days Designs a $20,000 ad campaign for Customer Dreceived payment last month 1. $___________What amount of Service revenue should the Agency record for Customer A? 2. $___________What amount of Service revenue should the Agency record for Customer B? 3. $___________Customer B pays within 10 days; how much will they pay? 4. $___________Determine the monthly Service revenue for the Agency 5. $___________Determine the Agencys Net service revenue for the month

Use the following to answer questions 6 7 MBC, Inc., reported the following amounts at the end of the year: Total sales $890,000 Accounts receivable 80,000 Sales allowances 500 Allowance for Uncollectible accounts 4,200 Sales discounts 10,000 Sales returns 1,000 6. $___________Determine total contra revenues for the company 7. $___________Determine net sales for the company

Use the following to answer questions 8 11 The following information pertains to JR, Inc. for the month of November: Credit sales $880,000 Accounts payable 35,000 Accounts receivable 81,000 Allowance for Uncollectible accounts 500 credit Cash sales 200,000 JR uses the percent of receivables method and estimates it will not collect 5% of accounts receivable.

8. $___________Determine the ending balance for the Allowance for Uncollectible Accounts 9. $___________Determine the appropriate amount to record for Bad Debt expense 10. $___________Assuming the Allowance for Uncollectible accounts had a $100 debit balance instead, determine the amount to record for Bad Debt expense 11. $___________After recording bad debt expense the Net Accounts Receivable is:

Use the following to answer questions 12 15 At December 31, KC Co reported accounts receivable of $50,000 and an allowance for uncollectible accounts of $300 (credit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 7% of accounts receivable. 12. $___________Estimate the amount of uncollectible receivables: 13. $___________When recording the adjusting entry for bad debt expense how much should Allowance for Uncollectible accounts be credited? 14. On January 10, a customers account balance of $100 is written off as uncollectible. Record the write-off. 15. $___________If Net Accounts receivable were $45,000 before the write-off, how much are Net Accounts receivable AFTER the write-off? Use the following to answer questions 16 - 19 For each transaction indicate whether it should: A. increase, B. decrease, or C. no effect. Credit sales transaction cycle: Assets Liabilities Stockholders equity Revenues Expenses 16. Provide services on account 17. Estimate uncollectible accounts 18. Write off accounts as uncollectible 19. Collect on account previously written off