ACCT 211 Homework 7 Accounting for Receivables Problems Assignment solutions complete answers

ACCT 211 Homework 7 Accounting for Receivables Problems Assignment solutions complete answers 

 

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Mayfair Company completed the following transactions and uses a perpetual inventory system.
 

June 4
Sold $1,300 of merchandise on credit (that had cost $800) to Natara Morris, terms n/15.
June 5
Sold $14,000 of merchandise (that had cost $8,400) to customers who used their Zisa cards. Zisa charges a 2% fee.
June 6
Sold $10,000 of merchandise (that had cost $6,000) to customers who used their Access cards. Access charges a 1% fee.
June 8
Sold $9,000 of merchandise (that had cost $2,900) to customers who used their Access cards. Access charges a 3% fee.
June 13
Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $1,080 balance in McKee’s account was from a credit sale last year.
June 18
Received Morris’s check in full payment for the June 4 purchase.

Required:
Prepare journal entries to record the preceding transactions and events.

 

At December 31, Hawke Company reports the following results for its calendar year.
 

Cash sales
$ 220,000
Credit sales
$ 550,000

In addition, its unadjusted trial balance includes the following items.
 

Accounts receivable
$ 495,000
debit
Allowance for doubtful accounts
$ 4,000
debit
Required:
1. Prepare the adjusting entry to record bad debts under each separate assumption.

a.   Bad debts are estimated to be 4% of credit sales.

b.   Bad debts are estimated to be 3% of total sales.

c.   An aging analysis estimates that 4% of year-end accounts receivable are uncollectible.


Adjusting entries (all dated December 31).

 

2. Bad debts are estimated to be 4% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.

 

3. An aging analysis estimates that 4% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.

 

On December 31, Jarden Company's Allowance for Doubtful Accounts has an unadjusted credit balance of $16,000. Jarden prepares a schedule of its December 31 accounts receivable by age.
 

Accounts Receivable
Age of Accounts Receivable
Expected Percent Uncollectible
$ 880,000
Not yet due
1.25%
352,000
1 to 30 days past due
2.00
70,400
31 to 60 days past due
6.50
35,200
61 to 90 days past due
32.75
14,080
Over 90 days past due
68.00
Required:
1. Compute the required balance of the Allowance for Doubtful Accounts at December 31 using an aging of accounts receivable.

 

2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to nearest whole percent. Do not round intermediate calculations.)

 

Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.
 
Year 1

a.   Sold $1,347,200 of merchandise on credit (that had cost $981,900), terms n/30.

b.   Wrote off $19,800 of uncollectible accounts receivable.

c.   Received $674,500 cash in payment of accounts receivable.

d.   In adjusting the accounts on December 31, the company estimated that 2.70% of accounts receivable would be uncollectible.

 
Year 2

e.   Sold $1,514,500 of merchandise (that had cost $1,336,600) on credit, terms n/30.

f.     Wrote off $26,900 of uncollectible accounts receivable.

g.   Received $1,214,400 cash in payment of accounts receivable.

h.   In adjusting the accounts on December 31, the company estimated that 2.70% of accounts receivable would be uncollectible.


Required:
Prepare journal entries to record Liang’s Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system, and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar.)

 

The following transactions are from Ohlm Company. (Use 360 days a year.)
 
Year 1

December 16
Accepted a(n) $10,600, 60-day, 6% note in granting Danny Todd a time extension on his past-due account receivable.
December 31
Made an adjusting entry to record the accrued interest on the Todd note.

Year 2

February 14
Received Todd’s payment of principal and interest on the note dated December 16.
March 2
Accepted a(n) $7,600, 6%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company.
March 17
Accepted a $3,700, 30-day, 7% note in granting Ava Privet a time extension on her past-due account receivable.
April 16
Privet dishonored her note.
May 31
Midnight Company dishonored its note.
August 7
Accepted a(n) $7,400, 90-day, 10% note in granting a time extension on the past-due account receivable of Mulan Company.
September 3
Accepted a $2,710, 60-day, 12% note in granting Noah Carson a time extension on his past-due account receivable.
November 2
Received payment of principal plus interest from Carson for the September 3 note.
November 5
Received payment of principal plus interest from Mulan for the August 7 note.
December 1
Wrote off the Privet account against the Allowance for Doubtful Accounts.

Required:
1-a. First, complete the table below to calculate the interest amount at December 31, Year 1.
1-b. Use the calculated value to prepare your journal entries for Year 1 transactions.
1-c. First, complete the table below to calculate the interest amounts.
1-d. Use those calculated values to prepare your journal entries for Year 2 transactions.
2. If Ohlm pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of receivables?