SOLVED:Journal entries

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(a) Dec. 31 Bad Debt Expense 1,400 Accounts Receivable—T.Thum 1,400

(b) (1) Dec. 31 Bad Debt Expense   [($840,000 – $28,000) X 1%] 8,120 Allowance for Doubtful   Accounts 8,120 (2) Dec. 31 Bad Debt Expense 8,900 Allowance for Doubtful Accounts   [($110,000 X 10%) – $2,100] 8,900

(c) (1) Dec. 31 Bad Debt Expense   [($840,000 – $28,000) X .75%] 6,090 Allowance for Doubtful   Accounts 6,090 (2) Dec. 31 Bad Debt Expense 6,800 Allowance for Doubtful Accounts   [($110,000 X 6%) + $200]

EXERCISE 8-5 Allowance for Doubtful Accounts 14,100 Accounts Receivable 14,100 Accounts Receivable 1,800 Allowance for Doubtful Accounts 1,800 Cash 1,800 Accounts Receivable 1,800 Bad Debt Expense 16,300 Allowance for Doubtful Accounts [$19,000 – ($15,000 – $14,100 + $1,800)] 16,300

EXERCISE 8-14

(a) Beginning accounts receivable $ 100,000 Net credit sales 1,000,000 Cash collections (920,000) Accounts written off (30,000) Ending accounts receivable $ 150,000 (b) $1,000,000/[($100,000 + $150,000)/2] = 8 (c) 365/8 = 45.6 days PROBLEM 8-7A

Jan. 5 Accounts Receivable—Zwingle Company 24,000 Sales Revenue 24,000 20 Notes Receivable 24,000 Accounts Receivable— Zwingle   Company 24,000 Feb. 18 Notes Receivable 8,000 Sales Revenue 8,000 Apr. 20 Cash ($24,000 + $540) 24,540 Notes Receivable 24,000 Interest Revenue   ($24,000 X 9% X 3/12) 540 30 Cash ($30,000 + $1,200) 31,200 Notes Receivable 30,000 Interest Revenue   ($30,000 X 12% X 4/12) 1,200 May 25 Notes Receivable 4,000 Accounts Receivable— Isabella Inc. 4,000 Aug. 18 Cash ($8,000 + $360) 8,320 Notes Receivable 8,000 Interest Revenue   ($8,000 X 8% X 6/12) 320 25 Accounts Receivable—Isabella Inc.   ($4,000 + $70) 4,070 Notes Receivable 4,000 Interest Revenue   ($4,000 X 7% X 3/12) 70 Sept. 1 Notes Receivable 12,000 Sales Revenue 12,000

The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales Revenue $840,000, and Sales Returns and Allowances $28,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that T. Thum’s $1,400 balance is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.

At December 31, 2013, Crawford Company had a balance of $15,000 in Allowance for Doubtful Accounts. During 2014, Crawford wrote off accounts totaling $14,100. One of those accounts ($1,800) was later collected. At December 31, 2014, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $19,000.

Prepare journal entries to record the 2014 transactions of Crawford Company.

Lashkova Company had accounts receivable of $100,000 on January 1, 2014. The only transactions that affected accounts receivable during 2014 were net credit sales of $1,000,000, cash collections of $920,000, and accounts written off of $30,000.

On January 1, 2014, Derek Company had Accounts Receivable $139,000, Notes Receivable $30,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Kaye Noonan Company. It is a 4-month, 12% note dated December 31, 2013. Derek Company prepares financial statements annually. During the year, the following selected transactions occurred.

Jan. 5 Sold $24,000 of merchandise to Zwingle Company, terms n/15.
20 Accepted Zwingle Company’s $24,000, 3-month, 9% note for balance due.
Feb. 18 Sold $8,000 of merchandise to Gerard Company and accepted Gerard’s $8,000, 6-month, 8% note for the amount due.
Apr. 20 Collected Zwingle Company note in full.
30 Received payment in full from Kaye Noonan Company on the amount due.
May 25 Accepted Isabella Inc.’s $4,000, 3-month, 7% note in settlement of a past-due balance on account.
Aug. 18 Received payment in full from Gerard Company on note due.
25 The Isabella Inc.’s note was dishonored. Isabella Inc.’s is not bankrupt; future payment is anticipated.
Sept. 1 Sold $12,000 of merchandise to Fernando Company and accepted a $12,000, 6-month, 10% note for the amount due.

Journalize the transactions.