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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
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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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