quick mail corp. reported the following on its balance sheet (in millions of dollars):

Project Description:

for quick mail corp., the overnight shipper. by selling on credit, the company cannot expect to collect 100% of its accounts receivable. at july 31, 2014, and 2015, respectively, quick mail corp. reported the following on its balance sheet (in millions of dollars);

july 31

2015 2014

accounts receivable $6990 $5830

less: allowance for uncollected accounts (1419) (860)

accounts receivable, net $5571 $4970

during the year ended july 31, 2015, quick mail corp. earned service revenue and collected cash from customers. assume uncollectible-account expense for the year was 4% of service revenue on account and that quick mail wrote off uncollectible receivables and made other adjustments as necessary. at year-end, quick mail ended with the foregoing july 31, 2015, balances.

1. prepare t-aacounts for accounts receivable and allowances for uncollectible accounts and insert the july 31, 2014, balances as given.

2. journalize the following assumed transactions of quick mail corp. for the year ended july 31, 2015:

a. service revenue was $98,480 million, of which 10% in cash and the remainder on account.

b. collections from customers on account were $84,341 million.

c. uncollectible-account expense was 4% of service revenue on account.

d. write-offs of uncollectible accounts receivable were $2,986 million.

e. on july 1, quick mail received a 2 month, 6%, $203 million note receivable from a large corporate customer in exchange for customer's past due amount; quick mail made proper year- end adjusting entry for the interest on this note.

f. quick mail's july 31, 2015 year- end bank statement reported $58 million of nsf checks from customers.

3. post your entries to the accounts receivable and the allowance for uncollectible accounts t-accounts.

4. compute the ending balances for accounts receivable and the allowance for uncollectible accounts and compare your balances to the actual july 31, 2015, amounts. they should be the same. how much does quick mail expect to collect from its customers after july 31, 2015?

5. show the net effect of these transactions on quick mail's net income for the year ended july 31, 2015.
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