Prepare the journal entries to record the transactions that occurred from April 1 to June 30 of the current year.
IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30 of the current year: April 10 Received an order from Peter’s Appliances, a wholesaler, for 10 machines. April 30 Sold 15 machines to Yuri Inc. on credit. May 1 The purchasing manager of Peter’s Appliances visited IceKreme’s factory and purchased 12 machines instead of the 10 machines that were previously ordered. May 5 Yuri Inc. paid for the machines purchased on April 30. May 7 Sold 2 machines to Cheng Ltd. on credit. May 10 Wrote off $12,000 of
The company uses the aging of accounts receivable method to determine the amount of
Determine the amount of receivables that may not be collectible in the future, and prepare the
IceKreme’s net accounts receivable were $80,000 at June 30 of the prior year.Calculate IceKreme’s average collection period for the current fiscal year and explain its meaning.
Evaluate IceKreme’s average collection period, knowing that two major competitors, Julia Corp. and Pino Ltd., reported average collection periods of 18.3 days and 30.7 days, respectively, for the same fiscal year.
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