Short Comprehensive ProblemThe Scooter Warehouse provided the following information at Dec...

Short Comprehensive Problem

The Scooter Warehouse provided the following information at December 31 ,2011 :

Marketable Securities

The company invested $26,000 in a portfolio of marketable securities on December 22, 2011. The portfolio's market value on December 31, 2011, had inrcreased in value to $28,500

Notes Receivable

On November 1, 201 1, The Scooter Warehouse sold 25 scooters to Bermuda Fantasy Resort for $65,000.The resort paid $5,000 at the point of sale and issued a one-year, $60,000, 5 percent note for the remaining balance. The note, plus accrued interest, is due in full on October 31, 2012. The Scooter Warehouse adjusts for accrued interest revenue monthly.

Accounts Receivable

The Scooter Warehouse uses a balance sheet approach to account for uncollectible accounts expense. Outstanding accounts receivable on December 31 ,2011, total $450,000. After aging these accounts, the company estimates that their net realizable value is $435,000. Prior to making any adjustment to record uncollectible accounts expense, The Scooter Warehouse's Allowance for Doubtful Accounts has a credit balance of $4,000.

Instructions

a.  Prepare the journal entry necessary to update the company's accounts immediately after performing its bank reconciliation on December 31, 2011.

b.  Prepare the journal entry necessary to adjust the company's marketable securities to market value at December 31, 2011.

c.  Prepare the journal entry necessary to accrue interest in December 201 1.

d.  Prepare the journal entry necessary to report the company's accounts receivable at their net realizable value at December 31 , 2011.

e.  Discuss briefly how the entry perform d in part d affects the accounts receivable turnover rate. Does the write-off of an account receivable affect the accounts receivable turnover rate differently than the entry performed in part d? Explain.