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:
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
(1) Prepare the Required AJE for December 31, 2000.
(2) Prepare the Required AJE for December 31, 2001.