Question

P6-6 Determining Bad Debt Expense Based on Aging Analysis and Interpreting Ratios LO6-4 IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30, 2017: April 10: Received an order from Peter's Appliances, a wholesaler, for 14 machines. April 30: Sold 21 machines to Yuri Inc. on credit May 1: The purchasing manager of Peter's Appliances visited IceKreme's factory and purchased 17 machines on credit, instead of the 14 machines that were previously ordered. May 5: Yuri Inc. paid for the machines purchased on April 30. May 7: Sold 10 machines to Cheng Ltd. on credit. May 10: Wrote off $14,000 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1, 2017. May 15: Peter's Appliances returned two defective machines and paid the amount due. June 1: Received $80,000 from Cheng Ltd. on account. June 30: Recovered $2,600 from the receivables that were written off on May 10. Additional information is as follows: • IceKreme sold all machines at $10,000 per unit. • All of IceKreme's sales were on credit with terms 2/10, n/30. • IceKreme's records included the following items and their balances as at March 31, 2017: Accounts receivable Allowance of doubtful accounts (credit balance) Net sales $ 52,000 16,200 520,000 Required: 1. Prepare the journal entries to record the transactions that occurred from April 1 to June 30, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

If possible I just need question 3 answered the rest is just for context.

Answer 1

Calculation of average collection period= Accounts receivable/ Sales * Number of Days
		Which is = $52000/$520000*365= 36.5 days