This assignment has a value of 5 points.

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.
CurlyCueshas not answered the phone for 8 months.
PrettyPennypaid 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.
MityManstill 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.