"Suppose Suzie estimates uncollectible accounts to be 10% of accounts receivable (which does not include the $6,000 note receivable from Myers Manufacturing). Record the adjustment for uncollectible accounts on June 30, 2013."
Previous information:
Jan. 24: Great Adventures purchases outdoor gear such as ropes, helmets, harnesses, compasses, and other miscellaneous equipment for $5,000 cash.
Feb. 25: Mr. Kendall's Boy Scout troop participates in a one-day TEAM adventure. Normally, Tony would charge a group of this size $3,500, but he wants to encourage kids to exercise more and enjoy the outdoors so he charges the group only $3,000.
Feb. 28 The Boy Scout troop pays the full amount owed, less the 5% quick-payment discount.
Mar. 19: Reynold's Management has its employees participate in a one-day TEAM adventure. Great Adventures charges $4,000, and Reynold's agrees to pay within 30 days.
Mar. 27: Reynold's pays the full amount owed, less the 5% quick-payment discount.
Apr. 7: Several men from the Elks Lodge decide to participate in a TEAM adventure. They pay $7,500, and the event is scheduled for the following week.
Apr. 14: The TEAM adventure is held for members of the Elks Lodge.
May 9: Myers Manufacturing participates in a TEAM adventure. Great Adventures charges $6,000, and Myers agrees to pay within 30 days.
Jun. 1-30: Several MBA groups participate in TEAM adventures during June. Great Adventures charges $24,000 to these groups, with payment due in July.
Jun. 30: Myers Manufacturing fails to pay the amount owed within the specified period and agrees to sign a three-month, 8% note receivable to replace the existing account receivable.