Business, 26.06.2021 17:30 Jolenesopalski
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 $ 260,000 Cash sales 580,000 Collections of accounts receivable 235,000 Uncollectible accounts charged off during the year 1,250 Required a. 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?
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Joey’s Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales,...
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