Following the instructions on the Receivables Directions, you will be presented with a scenario for which you must prepare adjusted journal entries for two different years.

Following the instructions on the Receivables Directions, you will be presented with a scenario for which you must prepare adjusted journal entries for two different years.

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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.
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.

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