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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
Problem 9-4A (35 minutes)
2014
a. Accounts Receivable......................................... 1,345,434
Sales............................................................. 1,345,434
To record sales on account.
b. Allowance for Doubtful Accounts..................... 18,300
c. Cash................................................................... 669,200
d. Bad Debts Expense........................................... 28,169
*Beginning receivables........................ $ 0
Credit sales.......................................... 1,345,434
** rounded to nearest dollar
Problem 9-4A (Concluded)
2015
e. Accounts Receivable............................................. 1,525,634
Sales.................................................................. 1,525,634
To record sales on account.
f. Allowance for Doubtful Accounts......................... 27,800
g. Cash........................................................................ 1,204,600
h. Bad Debts Expense................................................ 32,199
*Beginning receivables.............................. $ 657,934
Credit sales................................................ 1,525,634
Collections................................................. (1,204,600)
** rounded to nearest dollar
Problem 9-5A (75 minutes)
Part 1
2014
Dec. 16 Notes Receivable—D. Todd................................ 10,800
2015
Feb. 14 Cash..................................................................... 10,944
Interest Revenue*.......................................... 108
Mar. 2 Notes Receivable—Midnight Co........................ 6,100
17 Notes Receivable—A. Privet.............................. 2,400
Apr. 16 Accounts Receivable—A. Privet........................ 2,414
Interest Revenue........................................... 14
May 31 Accounts Receivable—Midnight Co.................. 6,222
Problem 9-5A (Concluded)
July 16 Cash..................................................................... 6,286
Interest Revenue*.......................................... 64
Aug. 7 Notes Receivable—Mulan.................................. 7,450
Sept. 3 Notes Receivable—N. Carson............................ 2,100
Nov. 2 Cash..................................................................... 2,135
Interest Revenue*.......................................... 35
5 Cash..................................................................... 7,636
Interest Revenue*.......................................... 186
Dec. 1 Allowance for Doubtful Accounts...................... 2,414
Part 2
Analysis Component: When a business pledges its receivables as security
for a loan and the loan is still outstanding at period-end, the business must
PROBLEM SET B
Problem 9-1B (30 minutes)
Aug. 4 Accounts Receivable—M. Carpenter....................... 3,700
Sales..................................................................... 3,700
To record sales on credit.
14 Cash........................................................................... 3,626
Sales Discounts*....................................................... 74
Accounts Receivable—M. Carpenter................. 3,700
To record cash received less discount.*($3,700 x .02)
Problem 9-2B (35 minutes)
Part 1
a. Expense is 2.5% of credit sales
Dec. 31 Bad Debts Expense............................................ 33,550
b. Expense is 1.5% of total sales
Dec. 31 Bad Debts Expense........................................... 35,505
c. Allowance is 6% of accounts receivable
Dec. 31 Bad Debts Expense............................................ 27,000
Part 2
Current assets
Accounts receivable................................... $575,000
Part 3
Current assets
Problem 9-3B (35 minutes)
Part 1
Calculation of the estimated balance of the allowance
Not due: $396,400 x .020 = $ 7,928
Part 2
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
Problem 9-4B (35 minutes)
2014
a. Accounts Receivable......................................... 685,350
Sales............................................................. 685,350
To record sales on account.
*Beginning receivables...................... $ 0
Credit sales........................................ 685,350
** Rounded to nearest dollar
Problem 9-4B (Concluded)
2015
e. Accounts Receivable.......................................... 870,220
Sales.............................................................. 870,220
To record sales on account.
*Beginning receivables............................ $ 193,670
Credit sales.............................................. 870,220
Collections............................................... (990,800)
Problem 9-5B (75 minutes)
Part 1
2014
Nov. 1 Notes Receivable—S. Julian.................................. 4,800
Accounts Receivable—S. Julian...................... 4,800
To record note received on account.
Apr. 30 Cash........................................................................ 6,324
Interest Revenue............................................... 124
