# You are the Accountant for WanneBee Corporation WannaBee Corporation has \$1,500,000 of Receivables on December 31, 2000. WannaBee uses the Allowance Method and historical

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Scenario:

You are the Accountant for WanneBee Corporation

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-NannyNancy        \$250,000

AR-BusyBody               \$75,000                 AR-AlphaBetCo          \$130,000

AR-DippyDo                  \$55,000                 AR-TipsyTurvy              \$98,000

AR-MerryMen              \$145,000                 AR-HappyHart            \$289,000

AR-CurlyCues            \$211,000                 AR-MityMan                   \$47,000

AR-PrettyPenny         \$109,000                 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% APR   for the remainder.

AlphaBetCo paid its account in full.

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.

• 7 years ago
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