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Okay Optical Inc OOI began operations in January 2013 selling inexpensive sunglasses to large retailers like Walgreens and other smaller stores Assume the following transactions occurred during

Okay Optical, Inc., (OOI) began operations in January 2013, selling inexpensive sunglasses to large retailers like Walgreens and other smaller stores. Assume the following transactions occurred during its first six months of operations.

January 1

Sold merchandise to Walgreens for $23,000; the cost of these goods to OOI was $14,700.

February 12

Received payment in full from Walgreens.

March 1

Sold merchandise to Bravis Pharmaco on account for $3,300; the cost of these goods to OOI was $1,550.

April 1

Sold merchandise to TonyAc€?cs Pharmacy on account for $8,300. The cost to OOI was $4,550.

May 1

Sold merchandise to Anjuli Stores on account for $2,300; the cost to OOI was $1,350.

June 17

Received $6,650 on account from TonyAc€?cs Pharmacy.

Required:
1.

Complete the following aged listing of customer accounts at June 30

Customer Total Balance June (1 month) May (2 months) April (3 months) Greater Than 3 Months
Anjuli $2300   $2300    
Bravis $3300       $3300
Tony          
Walgreens          
Total          
2.

Estimate the Allowance for Doubtful Accounts required at June 30, 2013, assuming the following uncollectible rates: one month, 1 percent; two months, 5 percent; three months, 20 percent; more than three months, 40 percent.

1 Month  
2 Months  
3 Months  
Greater than 3 Months  
Total  
3-a.

Show how OOI would report its accounts receivable on its June 30 balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Accounts Receivable  
Allowance for Doubtful Accounts  
Accounts Receivable, Net Allowance  
3-b.

What amounts would be reported on an income statement prepared for the six-month period ended June 30, 2013?

   
   
   
   
   
   
Income from Operations  

May 14 2020 View more View Less

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