IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between
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Question:
IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April and June of the current year:
April Received an order from Peter's Appliances, a wholesaler, for machines.
April Sold machines to Yuri Inc. on credit.
The purchasing manager of Peter's Appliances visited IceKreme's factory and purchased machines on credit,
May Yuri Inc. paid for the machines purchased ously ordered.
May Sold machines to Cheng Ltd on credit. on April
Wrote off $ of accounts receivable that were considered uncollectible. These receivables relate to sales
May Peter's Appliances paid the amount due to
June Recovered $ from the receivables that were written of on May
Additional information is as follows:
IceKreme sold all machines at $ per unit.
All of IceKreme's sales were on credit with terms
IceKreme's records included the following items and their balances as at March of the current year:
Accounts receivable
Net sales
Required:
Prepare the journal entries to record the transactions that occurred from April to June of the current year. If no entry is required for a transactionevent select No journal entry required" in the first account field.
The company uses the aging of accounts receivable method to determine the amount of bad debt expense. The estimated uncollectible rates for the various age groups are as follows: Hint: Use a timeline to keep track of accounts receivable in order to determine the age of these receivables.
a Determine the amount of receivables that may not be collectible in the future as on June of the current year.
Amount of uncollectible
b Prepare the journal entry to record bad debt expense at June of the current year, the company's fiscal yearend. If no entry is required for a transactionevent select No journal entry required" in the first account field.
tableView transaction list,View journal entry worksheet,Debit,CreditNoDate,General JournalBad debt expense,,Allowance for doubtful accounts,,
IceKreme's net accounts receivable were $ at June of the prior year. Calculate IceKreme's average collection period for the current fiscal year. Use days a year. Round intermediate calculations to decimal places. Round the final answer to decimal place.
Average collection period
Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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