[The following information applies to the questionsdisplayed below.]
Tony and Suzie are ready to expand Great Adventures even furtherin 2019. Tony believes that many groups in the community (forexample, Boy Scouts, church groups, civic groups, and localbusinesses) 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, scavengerhunts, nature hikes, and so on. The purpose of these one-day eventswould be for each member of the group to learn the importance ofTEAM (Together Everyone Achieves More).
Tony knows that most people are not familiar with these types ofactivities, so to encourage business he allows groups toparticipate in the event before paying. He offers a 6%quick-payment discount to those that pay within 10 days after theevent. He also guarantees that at least eight hours of outdooractivities will be provided or the customer will receive a 20%discount. For the first six months of the year, the followingactivities occur for TEAM operations.
Jan. 24 Great Adventures purchases outdoor gear suchas ropes, helmets, harnesses, compasses, and other miscellaneousequipment for $4,000 cash.
Feb. 25 Mr. Kendall’s Boy Scout troop participates in aone-day TEAM adventure. Normally, Tony would charge a group of thissize $2,500, but he wants to encourage kids to exercise more andenjoy the outdoors so he charges the group only $2,000. GreatAdventures provides these services on account.
Feb. 28 The Boy Scout troop pays the full amount owed,less the 6% quick-payment discount.
Mar. 19 Reynold’s Management has its employeesparticipate in a one-day TEAM adventure. Great Adventures providesservices on account for $3,000, and Reynold’s agrees to pay within30 days
Mar. 27 Reynold’s pays the full amount owed, less the6% quick-payment discount.
Apr. 7 Several men from the Elks Lodge decide toparticipate in a TEAM adventure. They pay $6,500, and the event isscheduled for the following week.
Apr. 14 The TEAM adventure is held for members of theElks Lodge.
May. 9 Myers Manufacturing participates in a TEAMadventure. Great Adventures provides services on account for$5,000, and Myers agrees to pay within 30 days.
Jun. 1?30 Several MBA groups participate in TEAMadventures during June. Great Adventures provides services onaccount for $19,000 to these groups, with payment due inJuly.
Jun. 30 Myers Manufacturing fails to pay the amountowed within the specified period and agrees to sign a three-month,9% note receivable to replace the existing account receivable.
Required:
1. Record TEAM adventure transactions occurringduring the first six months of 2019. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.)
2. As of June 30, 2019, Great Adventuresfinishes its first 12 months of operations. If Suzie wants toprepare financial statements, part of the process would involveallowing for uncollectible accounts receivable.
a. Suppose Suzie estimates uncollectibleaccounts to be 5% of accounts receivable (which does not includethe $5,000 note receivable from Myers Manufacturing). Record theadjustment for uncollectible accounts on June 30, 2019. (Ifno entry is required for a transaction/event, select "No journalentry required" in the first account field.)
b. Prepare a partial balance sheet showing thenet accounts receivable section. (Amounts to be deductedshould be indicated by a minus sign.)
