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Part 4: Uncollectible Accounts (Chapter 7) 1. Toy Cars had an accounts receivable balance of $40,100 on December 31, 2019. Prior to preparing their 2019 financial statements, Toy Cars estimated uncollectible accounts of $2,100. How should Toy Cars record this adjustment in their accounting records on December 31, 2019? Circle the impact of this uncollectible accounts estimate on the following financial statement totals: a) Net income income statement) Increases Decreases No Change b) Total assets (balance sheet) Increases Decreases No Change c) Total liabilities (balance sheet) Increases Decreases No Change d) Total stockholders' equity (balance sheet) Increases Decreases No Change Assuming that the allowance for doubtful accounts had no beginning balance, what is the net realizable value of receivables on Toy Cars' December 31, 2019 balance sheet? 2. In March 2020, Toy Cars decided to write off the $400 balance of Car Thief after invoicing this customer for 15 months. How should Toy Cars record this write-off in their accounting records? Circle the impact of this write-off on the following financial statement totals: a) Net income (income statement) Increases Decreases b) Total assets (balance sheet) Increases Decreases c) Total liabilities (balance sheet) Increases Decreases d) Total stockholders' equity (balance sheet) Increases Decreases No Change No Change No Change No Change

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