Name: ____________________________________________________

Required: Prepare a spreadsheet with separate worhsheets for problems 12a and 12b. Be sure to format your numbers and carefully label your answers and account names. The due date for this assignment has been moved to 1:00 PN, Tuesday, May 19, 2020.

In-class assignment #12a

Exide Corp has negotiated the sale of a machine to Rocky Boat on 5/1/2017 for $860,000. Rocky Boat has agreed to pay $160,000 down but wants to pay off the remainder of the purchase price in installments on 4/30 of each of the next five years. Exide bought the machine four years ago on May first for $1,000,000. The machine had an expected life of ten years and an expected salvage value of $100,000. A reasonable rate of interest for Rocky would be 8%

First calculate the value of the payments and then, make the required journal entry to record the sale on 5/1/2017, any required journal entries on 12/31/2017, and indicate how this transaction would be reflected in XYZs 12/31/2017 income statement and balance sheet.

In-class assignment #12b

You have been requested to construct an aging schedule and a desired ending balance in the allowance for doubtful accounts. You are also required to make any required journal entries.

• The current balance in the allowance for doubtful accounts is $45,000.
• You have also just received a payment of $6,500 from a customer whose account had been written off last month.

XYZ company

Accounts Receivable

as of 12/31/16

status amount due chance of collection desired allowance amount

Current 250,000 ______________ 97% ____________ ___________________

31-60 days 100,00 _______________ 90% ____________ _____________________

61-90 days 75,000 _________________ 70% ____________ _____________________

91-120 days 45,000 __________________ 50% ______________ _____________________

121 days + 25,000 ___________________ 0% _______________ _____________________

_______________________________________________________________________________________________________________________

495,000