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A company has a correct $25,000 year-end balance in its SalesDiscount account. Explain what that 25,000 represents.


Is that account closed out at the end of the year?

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Jamar Ferry
Jamar FerryLv2
28 Sep 2019

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You are the Accountant for WanneBeeCorporation

WannaBee Corporation has $1,500,000 of Receivables on December31, 2000. WannaBee uses the Allowance Method and historical dataindicates 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 phonefor 8 months.

PrettyPenny paid its account.

NannyNancy paid $150,000 and onNovember 21 made a 120 note at 4% APR for theremainder.

AlphaBetCo paid its account infull.

TipsyTurvy has closed itsbusiness.

HappyHart paid its bill.

MityMan still owes its account.

JumpingJax paid ½ its bill and willnot pay the rest.

The Receivables balance at the end of the year is $2,235,000

1. Prepare the Required AJE for December 31,2000.

2. Prepare the Required AJE for December 31,2001.

You are the Accountant for WanneBeeCorporation

WannaBee Corporation has $1,500,000 of Receivables on December31, 2000. WannaBee uses the Allowance Method and historical dataindicates 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 phonefor 8 months.

PrettyPenny paid its account.

NannyNancy paid $150,000 and onNovember 21 made a 120 note at 4% APR for theremainder.

AlphaBetCo paid its account infull.

TipsyTurvy has closed itsbusiness.

HappyHart paid its bill.

MityMan still owes its account.

JumpingJax paid ½ its bill and willnot pay the rest.

The Receivables balance at the end of the year is $2,235,000

1. Prepare the Required AJE for December 31,2000.

2. Prepare the Required AJE for December 31,2001.

(AJE stands for Adjusted Journal Entry)

Scenario:

You are the Accountant for WanneBeeCorporation

WannaBee Corporation has $1,500,000 of Receivables on December31, 2000. WannaBee uses the Allowance Method and historical dataindicates 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 phonefor 8 months(write it off)

PrettyPenny paid its account.

NannyNancy paid $150,000 and onNovember 21 made a 120 note at 4% APR for the remainder.

AlphaBetCo paid its account infull.

TipsyTurvy has closed itsbusiness.

HappyHart paid its bill.

MityMan still owes its account.

JumpingJax paid

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