Question

14

The following information applies to the questions displayed below.]

Tony and Suzie are ready to expand Great Adventures even further in 2022. Tony believes that many groups in the community (for example, Boy Scouts, church groups, civic groups, and local businesses) would like to hold one-day outings for their members. Groups would engage in outdoor activities such as rock climbing, fishing, capture the flag, paintball, treasure hunts, scavenger hunts, nature hikes, and so on. The purpose of these one-day events would be for each member of the group to learn the importance of TEAM (Together Everyone Achieves More).

Tony knows that most people are not familiar with these types of activities, so to encourage business he allows groups to participate in the event before paying. He offers a 4% quick-payment discount to those that pay within 10 days after the event. He also guarantees that at least eight hours of outdoor activities will be provided or the customer will receive a 20% discount. For the first six months of the year, the following activities occur for TEAM operations.

Jan.		24		Great Adventures purchases outdoor gear such as ropes, helmets, harnesses, compasses, and other miscellaneous equipment for $4,100 cash.
Feb.		25		Mr. Kendall’s Boy Scout troop participates in a one-day TEAM adventure. Normally, Tony would charge a group of this size $2,600, but he wants to encourage kids to exercise more and enjoy the outdoors so he charges the group only $2,100. Great Adventures provides these services on account.
Feb.		28		The Boy Scout troop pays the full amount owed, less the 4% quick-payment discount.
Mar.		19		Reynold’s Management has its employees participate in a one-day TEAM adventure. Great Adventures provides services on account for $3,100, and Reynold’s agrees to pay within 30 days.
Mar.		27		Reynold’s pays the full amount owed, less the 4% quick-payment discount.
Apr.		7		Several men from the Elks Lodge decide to participate in a TEAM adventure. They pay $6,600, and the event is scheduled for the following week.
Apr.		14		The TEAM adventure is held for members of the Elks Lodge.
Apr.		30		Myers Manufacturing participates in a TEAM adventure. Great Adventures provides services on account for $5,100, and Myers agrees to pay within 30 days.
May		31		Myers Manufacturing fails to pay the amount owed within the specified period and agrees to sign a three-month, 7% note receivable to replace the existing account receivable.
Jun.		15		Several MBA groups participate in TEAM adventures. Great Adventures provides services on account for $19,500 to these groups, with payment due in July.

2. Consider the following information as of June 30, 2022.

Suzie estimates uncollectible accounts to be 8% of accounts receivable (which does not include the $5,100 note receivable from Myers Manufacturing). Prepare the adjusting entry for uncollectible accounts. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.) View transaction ist Journal entry worksheet Record adjusting entry for uncollectible accounts Note: Enter debits before credits General Journal Debit Credit Jun 30, 2022 Record entry Clear entry View general Journal

Answer 1

Answer	A
	Calculation of Account Receivable for the month End June
Date	Particulars		Amount Receivables
June'15	MBA Group Participate Team Adventure		$                        19,500.00
	Uncollectible Account	8%
	Journal Entry
Date	GENERAL Journals	Debit	Credit
Jun 30,2022	Profit and Loss A/C	$       1,560.00
	Provision for Uncollectible A/C		$                          1,560.00
	(Being :Adjustment Entry for 8% uncollectible ac on Account receivable has been made)
Answer	B
	Accrue one Month interest on Note Receivable
			Amount Receivables
May"31	7% Note Receivable		$                          5,100.00
Date	GENERAL Journals	Debit	Credit
Jun 30,2022	7% Note Receivable A/C	$           357.00
	Accrued interest on note receivable A/C		$                              357.00
	(Being: Interest Accrued on 7% Note Receivable, adjustment entry on Accrued interest has been passed)
Answer	C
	GREAT ADVENTURES, INC
	Partial Balance Sheet
	30-Jun-22
	Assets
	Current Assets		Amount
	Account Receivables
	MBA Group	$     19,500.00
	Less: Provision for Uncollectible receivable	$     (1,560.00)	$                        17,940.00
	7% Note Receivable A/C	$       5,100.00
	Add:Accrued interest on note receivable	$           357.00	$                          5,457.00
	Net Accounts Receivables		$                        23,397.00