Reference no: EM131874829

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.

TipsyTurvy has closed its business.

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.