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141. Journalize the following transactions in the accounts of Simmons Company:
Mar 1 Received a $60,000, 60-day, 6% note dated March 1 from Bynum Company on
account.
Mar 18 Received a $25,000, 60-day, 9% note dated March 18 from Solo Company
on account.
Apr. 30 The note dated March 1 from Bynum Company is dishonored, and
the customer’s account is charged for the note, including interest.
May 17 The note dated March 18 from Solo Company is dishonored, and
the customer’s account is charged for the note, including interest.
July 29 Cash is received for the amount due on the dishonored note dated March 1 plus
interest for 90 days at 8% on the total amount debited to Bynum Company on April 30.
Aug. 23 Wrote off against the allowance account the amount charged to
Solo Company on May 17 for the dishonored note dated March 18.
142. Financial Statement data for the years ended December 31 for Parker Corporation is as follows:
2012 2011
Net Sales $2,595,600 $2,409,500
Accounts Receivable
Beginning of the year $ 390,000 $400,000
End of the year 434,000 390,000
a) Determine the accounts receivable turnover for 2012 and 2011.
b) Determine the number of days’ sales in receivables for 2012 and 2011.
c) Does the change in accounts receivable turnover and number of days’ sales in receivables from 2011 to 2012
indicate a favorable or unfavorable trend.?
143. Journalize the following transactions for Solley Company that occurred during 2011 and 2012.
November 14, 2011 Received a $4,800.00, 90-day, 9% note from Alan Hibbetts in payment of his account.
December 31, 2011 Accrued interest on the Hibbetts note.
February 12, 2012 Received the amount due from Hibbetts on his note.
Date
Description
Post Ref
Debit
Credit
144. For each of the following notes receivables held by Rogers Company determine the interest revenue to be
reported on the income statements for 2011 and 2012. Round answers to nearest whole dollar.
Date
Face
Rate
Time
2011 Interest Revenue
2012 Interest Revenue
Aug 8, 2011
$15,000
7%
180 days
Oct 7, 2011
$22,000
8%
60 days
Jan 6, 2012
$30,000
8%
90 days
Nov 12, 2011
$28,000
9%
60 days
145. a) The aging of Torme Designs shown below. Calculate the amount of each periodicity range that is
deemed to be uncollectible.
Est Uncollectible
Accts
Age Interval:
Balance:
Percentage:
Amount:
Not past due
850,000
3.50%
1~30 days past due:
47,500
5.00%
31~60 days past due:
21,750
10.00%
61~90 days past due:
11,250
20.00%
91~180 days past due:
5,065
30.00%
181~365 days past due:
2,500
50.00%
Over 365 days past due:
1,145
95.00%
Total:
939,210
b) If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for the bad debt expense for the year.
146. For each of the following scenarios, indicate the amount of the adjusting journal entry for Bad Debt
Expense to be recorded in 2014, the balance in Allowance for Doubtful Accounts after adjustment at December
31, 2014, and the net realizable value of Accounts Receivable at December 31, 2014:
a) Based on an analysis of Simmon’s Company’s $380,000 balance in Accounts Receivable at December 31,
2014, is was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for
Doubtful Accounts before adjustment.
b) Blake Company had net credit sales of $900,000 during 2014, and has an Accounts Receivable balance of
$425,000 at December 31, 2014, and an Allowance for Doubtful Accounts credit balance of $11,000 before
adjustment. Blake estimates Bad Debt Expense as 3/4 of 1% of net credit sales.
c) Hidgon Inc. has a balance of $812,000 in Accounts Receivable at December 31, 2014. An analysis of those
receivables shows $24,000 will probably not be collected. Before adjusting entries are prepared, the Allowance
for Doubtful Accounts has a debit balance of $750.
147. Mr. Potts issued a 90-day, 7% note for $200,000, dated February 3rd to Valley Co. on account. (Assume a
360-day year when calculating interest.)
a. Determine the due date of the note.
b. Determine the interest.
c. Determine the maturity value of the note.
d. Journalize the entry to record the issuance of the note by Potts on Feb. 3.
e. Journalize the entry to record the receipt of payment of the note at maturity by Valley Co.
148. Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a customer on account.
(Assume a 360-day year when calculating interest.)
a.
Determine the due date of the note.
b.
Determine the maturity value of the note.
c.
Journalize the entry to record the receipt of the payment of the note at maturity.
149. Watson Company issued a 60-day, 8% note for $18,000, dated April 5, to Laker Company on account.
(Assume a 360-day year when calculating interest.)
(a)
Determine the due date of the note.
(b)
Determine the maturity value of the note.
(c)
Journalize the entries to record the
following:
(1)
receipt of the note by the payee, and
(2)
receipt by the payee of the amount due on the note at maturity. Round answers to the
nearest $1.
150. On the basis of the following data related to assets due within one year for Webb Co., prepare a partial
balance sheet in good form at December 31, 2014. Show total current assets.
Cash
$96,000
Notes receivable
50,000
Accounts receivable
275,000
Allowance for doubtful accounts
40,000
Interest receivable
1,000
151. Journalize the following transactions (Assume a 360-day year when calculating interest.):
Mar. 1
Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.
May 30
The note of March 1 was dishonored.
152. The following are the current assets from Hanes Co. as of December 31, 2014:
Accounts Receivable
38,000
Allowance for Doubtful Accounts
5,000
Cash
45,000
Interest Receivable
5,500
Merchandise Inventory
88,000
Notes Receivable
100,000
Prepare the current asset section of the balance sheet.
153. For a business that uses the allowance method of accounting for uncollectible receivables:
(a)
Journalize the entries to
record the following:
(1)
Record the adjusting entry at December 31, 2010, the end of the fiscal year, to record the bad debt
expense. The accounts receivable account has a balance of $800,000, and the contra asset account before
adjustment has a debit balance of $600. Analysis of the receivables indicates uncollectible receivables of
$18,000.
(2)
In March, 2011, the $350 owed by Fronk Co. on account is written off as uncollectible.
(3)
In November, 2011, $200 of the Fronk Co. account is reinstated and payment of that amount is received.
(4)
In December, 2011, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as
uncollectible.
(b)
Redo the entries in steps (2),
(3) and (4) assuming the
company uses the direct write-
off method.
154. For the fiscal years 2009 and 2010, Apple Co. reported the following:
Year Ended December
31,
2009
2010
Net Sales
$44,123,486
$34,124,961
Accounts Receivable
749,321
719,365
a. Compute the accounts receivable turnover for 2010.
b. Compute the number of days’ sales in receivable at the end of 2010.
155. Journalize the following transactions of Upton Drugs:
July 8
Received a $180,000, 90-day 8% note dated July 8 from Miracle Chemical on account.
Oct. 6
The note is dishonored by Miracle Chemical.
Nov. 5
Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Miracle
Chemical on Oct. 6.
