Question

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- Goodboy ......... $25,000
AR-BusyBody ......... $75,000
AR-DippyDo .......... $55,000
AR-MerryMen ......... $145,000
AR-CurlyCues ......... $211,000
AR-PrettyPenny ......... $109,000
AR-NannyNancy ........ $250,000
AR-AlphaBetCo ......... $130,000
AR-TipsyTurvy ........ $98,000
AR-HappyHart ......... $289,000
AR-MityMan ......... $47,000
AR-JumpingJax ......... $66,000
During 2001 the following events occurred:
Goodboy defaulted.
BusyBody declared bankruptcy but paid $19,000.
DippyDo paid the account in full.
MerryMen still owes $48,000.
CurlyCues has not answered the phone for 8 months.
PrettyPenny paid its account.
NannyNancy paid $150,000 and on November 21 made a 120 note at 4% APRfor the remainder.
AlphaBetCo paid its account in full.
TipsyTurvy has closed its business.
HappyHart paid its bill.
MityMan still owes its account.
JumpingJax 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.



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  • CreatedAugust 05, 2013
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