Problem 2

1.Read the following instructions and enter and submit all information on the Group Project Excel spreadsheet Problem 2 parts 2 - 6 tab and Problem 2 part 7- 8 tab.

2.Open the following selected accounts recording the opening balances as of January 1 of the current year. In the (Group Project Excel Spreadsheet Problem 2 Parts 2 - 6 tab).

114.1	Allowance for doubtful accounts	12,200 Credit
313	Income summary
718	Bad debts expense

3.Record the following transactions in general journal form in the Group Project Excel Spreadsheet Problem 2 Parts 2 - 6 tab.

4.Post these transactions to the three selected accounts above and to Accounts receivable in the Group Project Excel Spreadsheet Problem 2 parts 2 - 6 tab.

5.Enter the ending balances in the three accounts above and enter the ending balance in the Accounts Receivable account. Enter those balances in the Group Project Excel Spreadsheet Problem 2 parts 2 - 6 tab.

Apr 1, 09	Accepted a $20,000, one - year, 8% note dated April 1 from Bruce Hanson for the sale of inventory; Cost of Goods Sold was $16,500.
June 27	Wrote off the $2,375 balance owed by Miller Corp., which has no assets.
Oct. 5	Received 25% of the $12,000 balance owed by F.M. Knox Co., a bankrupt, and wrote off the remainder as uncollectible.
Dec. 31	Based on an analysis of the $257,724 of accounts receivable, it was estimated that $14,500 will be uncollectible. Record the adjusting entry using the Aging method.
Dec. 31	Record the adjusting entry for interest accrued on the Bruce Hanson note
Dec. 31	Record the entries to close the appropriate accounts into Retained Earnings.
April 1, 10	Collected the maturity value on the Hanson note.

6.Determine the net accounts receivable (the amount Summer expects to collect as of December 31 and enter in the Group Project Spreadsheet Problem 2 Parts 2 - 6 tab).

7.Compute the accounts receivable turnover and the days sales in receivables for the year. Assume that there were $1,800,000 sales account. (You will need to refer to the Group Project Excel Spreadsheet Problem 2 part 7 - 8 tab).

8.How is Summer Company doing with collection of their accounts receivable compared to the industry? Assume the industry average for the accounts receivable turnover is 11 and the industry average for the days sales in receivables is 37 days? (Enter in the Group Project Excel Spreadsheet Problem 2 part 7- 8 tab).

Submit one set of answers per group for all four problems. Make sure to include each group members name at the top of each spreadsheet.

Problem 2: Requirement 2 Accounts Receivable A/C 114 172,099 1,800,000 1,700,000 Bal. 12/31 1. Represents all of the sales on account for the year 2. Represents collections from customers on account for the year Allow. For doubtful accounts A/C 114.1 Retained Earnin C 313 300,000 Jan 1 Bad Debts Ex eA/C718 Bal. Problem 2: Requirement 3 Journal Entry Date Accounts Debit Credit Apr. 109 Journal Entry Date Accounts Debit Credit Jun. 27 09 Journal Entry Date Accounts Debit Credit Oct 509