ACCT $2101$: Exercise $7-10$A $($Algo$)$ Accounting for uncollectible accounts: percent of revenue allowance versus direct write$-$off method LO $7-1,7-4$

Joey$$s Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. During Year $1,$ its first year of operations, Joey$$s Bike Shop experienced the following:

Sales on account $ $262,000$

Cash sales $602,400$

Collections of accounts receivable $248,900$

Uncollectible accounts charged off during the year $1,244$

Required:

Assume that Joey$$s Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that $1$ percent of its sales on account will not be collected. Answer the following questions:

$(1)$ What is the Accounts Receivable balance at December $31,$ Year $1?$

$(2)$ What is the ending balance of the Allowance for Doubtful Accounts at December $31,$ Year $1,$ after all transactions and adjustments are posted?

$(3)$ What is the amount of uncollectible accounts expense for Year $1?$

$(4)$ What is the net realizable value of accounts receivable at December $31,$ Year $1?$

Assume that Joey$$s Bike Shop uses the direct write$-$off method of accounting for uncollectible accounts. Answer the following questions:

$(1)$ What is the Accounts Receivable balance at December $31,$ Year $1?$

$(2)$ What is the amount of uncollectible accounts expense for Year $1?$

$(3)$ What is the net realizable value of accounts receivable at December $31,$ Year $1?$