WannaBee Corporation has $1,500,000 of Receivables on December 31, 2000. WannaBee uses the Allowance Method and historical data indicates that 7% of receivables become uncollectible. The end of year balance in the ADA is 0.
The following are the 2000 end of year receivables.
AR- Good boy.........$25,000
AR-Busy Body.........$75,000
AR-Dippy Do ..........$55,000
AR-Merry Men .........$145,000
AR-Curly Cues .........$211,000
AR-Pretty Penny .........$109,000
AR-Nanny Nancy ........$250,000
AR-Alpha BetCo .........$130,000
AR-Tipsy Turvy ........$98,000
AR-Happy Hart .........$289,000
AR-Mity Man .........$47,000
AR-Jumping Jax ......... $66,000
During 2001 the following events occurred: Good boy defaulted.
Busy Body declared bankruptcy but paid $19,000.Dippy Do paid the account in full.
Merry Men still owes $48,000.
Curly Cues has not answered the phone for 8 months.
Pretty Penny paid its account.
Nanny Nancy paid $150,000 and on November 21 made a 120 note at 4% APR for the remainder.
Alpha BetCo paid its account in full.
Tipsy Turvy has closed its business.
Happy Hart paid its bill.
Mity Man still owes its account.
Jumping Jax paid ½ its bill and will not pay the rest.
The Receivables balance at the end of the year is $2,235,000
Assignments:
(1) Prepare the Required AJE for December 31, 2000.
(2) Prepare the Required AJE for December 31, 2001.