Portage Pretzels, Inc. (PPI) Portage Pretzels, Inc. Entered its first full year January 1, 2021. From the prior partial

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Portage Pretzels Inc Ppi Portage Pretzels Inc Entered Its First Full Year January 1 2021 From The Prior Partial 1 (63.34 KiB) Viewed 45 times

Portage Pretzels, Inc. (PPI) Portage Pretzels, Inc. Entered its first full year January 1, 2021. From the prior partial year (2020), PPI enjoyed amazing first-year success with its gourmet flavored hard pretzels. The most scrumptious flavors included honey mustard, dill, jalapeno, Cajun, garlic parmesan, pizza, and buttery. PPI entered 2021 with a strong wholesale business and a quickly growing on-line retail business. With 2021 gross sales of nearly $1 million, the company set aside allowances for uncollectible accounts of $2,765 as of January 1, 2021. 2021 was a great year. Gross sales skyrocketed to $1,975,500. Wholesale sales accounted for 83% of total sales, and retail sales were exclusively on-line and paid for with credit/debit cards. Credit card processing fees are 2.3% of gross retail sales. Pretzels quality is paramount to PPI's success. Dated and returned items only were $1,236 for the entire year. Wholesale customers are offered 1% 10 Net 30 terms. Sixty-two percent (62%) of wholesale revenues are subject to the sales discount. During 2021, PPI wrote off the following accounts during 2021: 1) Patty's Pretzel Place $1,100, 2) Jac's Bar and Grill $635, and Harry's Unfriendly Markets $345. PPI's accountants estimate uncollectible accounts with aging method with the following estimates for uncollectible accounts by age: Days Past Due Percent Uncollectible Amount in Classification Current 2% $80,000 1-30 days 4% $22,000 31-60 days 8% $12,000 >60 days 15% $ 6,000 Required 1. Prepare the required journal entries to capture the contra-revenue effects listed above. 2. Prepare a sales presentation that reconciles gross sales to net sales.