P$5-6($Algo$)$ Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios LO$5-3,5-4$

IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April $1$ and June $30$ of the current year:

April $10$ Received an order from Peter$$s Appliances, a wholesaler, for $10$ machines.

April $30$ Sold $15$ machines to Yuri Inc. on credit.

May $1$ The purchasing manager of Peter$$s Appliances visited IceKreme$$s factory and purchased $12$ machines on credit, instead of the $10$ machines that were previously ordered.

May $5$ Yuri Inc. paid for the machines purchased on April $30.$

May $7$ Sold $2$ machines to Cheng Ltd$.$ on credit.

May $10$ Wrote off $$12,100$ of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April $1$ of the current year.

May $10$ Peter$$s Appliances paid the amount due to IceKreme.

June $30$ Recovered $$3,050$ from the receivables that were written off on May $10.$

Additional information is as follows:

IceKreme sold all machines at $$10,500$ per unit.

All of IceKreme$$s sales were on credit with terms n$/30.$

IceKreme$$s records included the following items and their balances as at March $31$ of the current year:

Accounts receivable $ $62,000$

Allowance of doubtful accounts $($credit balance$)15,500$

Net sales $625,000$

Required:

$1.$ Prepare the journal entries to record the transactions that occurred from April $1$ to June $30$ of the current year. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

The company uses the aging of accounts recelvable method to determine the amount of bad debt expense. The estimated uncolfectible rates for the varlous age groups are as follows: $($Hht: Use a timeline to keep track of accounts recelvable in order to determine the age of these recelvables.$)$

a$.$ Determine the amount of recelvables that may not be collectible in the future as on June $30$ of the current year.

Amourt of uncollectilie

S $12,000$

b$.$ Prepare the joumal entry to record bad debt expense at June $30$ of the current year, the company's fiscal year$-$end. $($If no entry is required for a transactlon$/$event$,$ select $"$No Journal emtry required" in the first account fleld.$).$

$\backslash$table$[[$No$,$Date,General Journal,Debit,Credil$],[1,$June $30,$Bait debt experse,$5,630,],[,,$Alowance far dowbilul accounts,,$5,630]]$

IceKreme's net accounts recelvable were $$81,000$ at June $30$ of the prior year. Calculate lcekreme's average collection period for the current fiscal year. $($Use $365$ days a year. Round intermediate calculations to $2$ decimal places, Round the final answer to $1$ decimal place.$)$

Arerage collection period

days