Chapter 09 – Accounting for Receivables
Exercise 9-8 (20 minutes)
Feb. 1 Allowance for Doubtful Accounts…………….………….. 6,800
Accounts Receivable—Oakley Co…..…………...... 900
Accounts Receivable—Brookes Co…………….….. 5,900
To write off specific accounts.
Exercise 9-9 (25 minutes)
a. Expense is 3.0% of credit sales
Dec. 31 Bad Debts Expense……………………………………….. 9,000
Allowance for Doubtful Accounts………..……. 9,000
To record estimated bad debts
[$300,000 x .03].
c. Allowance is 6% of accounts receivable
Dec. 31 Bad Debts Expense……………………………………….. 12,500
Allowance for Doubtful Accounts………..……. 12,500
To record estimated bad debts.*
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Chapter 09 – Accounting for Receivables
Exercise 9-10 (10 minutes)
2014
Dec. 13 Notes Receivable—M. Lee……………….…….. 9,500
Accounts Receivable—M. Lee.............. 9,500
To record receipt of note on account.
Exercise 9-11 (15 minutes)
2015
Jan. 27 Cash……………………………………………………………... 9,595
Interest Revenue*………………………..…..………. 57
17 Notes Receivable—H. Cheng………...…………..….. 2,000
Accounts Receivable—H. Cheng…….……..…. 2,000
To record receipt of note on account.
May 1 Allowance for Doubtful Accounts…………………… 2,015
Accounts Receivable—H. Cheng…….……..…. 2,015
To write off account.
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Chapter 09 – Accounting for Receivables
Exercise 9-12 (15 minutes)
Nov. 1 Notes Receivable—K. White………….…..………… 6,000
Accounts Receivable—K. White………....….. 6,000
To record receipt of note on account.
Exercise 9-13 (20 minutes)
Mar. 21 Notes Receivable—T. Jackson…………………..…... 9,500
Accounts Receivable—T. Jackson................ 9,500
To record receipt of note on account.
Sept. 17 Accounts Receivable—T. Jackson....………......... 9,880
Interest Revenue…………..………..…………..…… 380
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Chapter 09 – Accounting for Receivables
Exercise 9-14 (20 minutes)
July 4 Accounts Receivable………………….………..……….. 7,245
Sales………………………………………..…..…………. 7,245
To record sales on credit.
To record cash received on account.
27 Cash……………………………………………………………... 10,000
Notes Payable………………………………….………. 10,000
To record cash from a loan.
Note to Financial Statements
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Chapter 09 – Accounting for Receivables
Exercise 9-15 (15 minutes)
Year 2014 accounts receivable turnover:
= 8.8 times
Year 2015 accounts receivable turnover:
Analysis: Raheem Company turned over its accounts receivable 0.6 (9.4 – 8.8)
Exercise 9-16 (25 minutes)
(¥ in millions)
a. Expense is 0.4% of total revenues
Dec. 31 Bad Debts Expense……………………………………….. 36,164
Allowance for Doubtful Accounts……....…….. 36,164
To record estimated bad debts
[9,041,071 x 0.004].
b. Allowance is 2.0% of trade receivables, gross
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Education.
$335,280
($41,400 + $34,800)/2
Chapter 09 – Accounting for Receivables
PROBLEM SET A
Problem 9-1A (30 minutes)
June 4 Accounts Receivable—N. Morris…….........…........... 650
Sales………………………………………………….…..…... 650
To record sales on credit.
6 Cost of Goods Sold……………….……….…...............….......3,800
Merchandise Inventory…………………………………….… 3,800
To record cost of sales.
8 Accounts Receivable—Access………..................….. 4,263
Credit card expense*…………………………………………. 87
Sales………………………………………………….…..…... 4,350
To record credit card sales less fee. *($4,350 x .02)
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Chapter 09 – Accounting for Receivables
18 Cash……………………………………………..…..……..…..…. 637
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Chapter 09 – Accounting for Receivables
Problem 9-2A (35 minutes)
Part 1
a. Expense is 1.5% of credit sales
Dec. 31 Bad Debts Expense………………………………………..85,230
Allowance for Doubtful Accounts………..……. 85,230
To record estimated bad debts
[$5,682,000 x .015].
b. Expense is 1% of total sales
Dec. 31 Bad Debts Expense………………………………………..75,870
Part 2
Current assets
Accounts receivable…………………………....………$1,270,100
Less allowance for doubtful accounts............. (68,650)* $1,201,450
Part 3
Current assets
Accounts receivable…………………………....………$1,270,100
Less allowance for doubtful accts……..………… (63,505)** $1,206,595
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Chapter 09 – Accounting for Receivables
Problem 9-3A (35 minutes)
Part 1
Calculation of the estimated balance of the allowance for uncollectibles
Not due: $830,000 x .0125 = $10,375
Part 2
Dec. 31 Bad Debts Expense………………………………………. 27,150
Allowance for Doubtful Accounts…………….. 27,150
To record estimated bad debts.*
Part 3
Writing off the account receivable in 2016 will not directly affect year 2016
net income. The entry to write off an account involves a debit to Allowance
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Chapter 09 – Accounting for Receivables
Problem 9-4A (35 minutes)
2014
a. Accounts Receivable………………………………..…. 1,345,434
Sales……………………………………………………… 1,345,434
To record sales on account.
To record cash received on account.
d. Bad Debts Expense……………………..…………..…. 28,169
Allowance for Doubtful Accounts .............. 28,169
To record estimated bad debts.*
*Beginning receivables….................... $ 0
Credit sales…….….............................. 1,345,434
Collections…….………......................... (669,200)
Write-offs………..…..…………................ (18 ,300)
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