EXERCISE 8-3
(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
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| 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
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