Chapter 09 – Accounting for Receivables
Problem 9-4A (Concluded)
2015
e. Accounts Receivable…………………………………….…. 1,525,634
Sales………………………………………………………….. 1,525,634
To record sales on account.
Cost of Goods Sold……………………..……….………….…..1,250,000
Merchandise Inventory……………………………………. 1,250,000
To record cost of sales.
*Beginning receivables…..…….….............. $ 657,934
Credit sales…….………….…........…............ 1,525,634
Collections…….………….……..................... (1,204,600)
Write-offs………………………………………….. (27,800)
Ending receivables…..…….…….......…...... 951,168
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Chapter 09 – Accounting for Receivables
Problem 9-5A (75 minutes)
Part 1
2014
Dec. 16 Notes Receivable—D. Todd…………………………… 10,800
Accounts Receivable—D. Todd….…….......... 10,800
To record note received on account.
Mar. 2 Notes Receivable—Midnight Co………….………… 6,100
Accounts Receivable—Midnight Co……….... 6,100
To record note received on account.
17 Notes Receivable—A. Privet…………………….…… 2,400
Accounts Receivable—A. Privet 2,400
To record note received on account.
note plus interest [$2,400 x .07 x 30/360= $14].
May 31 Accounts Receivable—Midnight Co.................. 6,222
Interest Revenue*……………………………….…… 122
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Chapter 09 – Accounting for Receivables
Problem 9-5A (Concluded)
July 16 Cash…………………………………..………….………….… 6,286
Interest Revenue*……………………………….…… 64
Accounts Receivable—Midnight Co……….... 6,222
To record cash received on account
plus additional interest.
*[$6,222 x .08 x 46/360= $64 (rounded)]
5 Cash………………………………….…….………….………. 7,636
Interest Revenue*……………………………….…… 186
Notes Receivable—Mulan..….………….………. 7,450
To record cash received on note plus
Interest. *($7,450 x .10 x 90/360 = $186)
Dec. 1 Allowance for Doubtful Accounts..…….............. 2,414
Accounts Receivable—A. Privet………………. 2,414
To record write-off of account.
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
Chapter 09 – Accounting for Receivables
PROBLEM SET B
Problem 9-1B (30 minutes)
Aug. 4 Accounts Receivable—M. Carpenter…..……..…..….. 3,700
Sales………………………………………………….……….. 3,700
To record sales on credit.
11 Accounts Receivable—Aztec…………......…....…..….. 1,225
Credit card expense*…………………………………………. 25
Sales………………………………………………….……….. 1,250
To record credit card sales less fee. *($1,250 x .02)
Cost of Goods Sold…….………………………....…..…....….... 900
Merchandise Inventory…………………………………….… 900
To record cost of sales.
14 Cash……………………………………..…………………………. 3,626
Sales Discounts*………………………………....…....…..… 74
Accounts Receivable—M. Carpenter......…..…... 3,700
To record cash received less discount.*($3,700 x .02)
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Chapter 09 – Accounting for Receivables
Accounts Receivable—Craw Co..…..…....…....... 498
To write off account due.
25 Cash……………………..………………...…....…....…..…...... 4,400
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Chapter 09 – Accounting for Receivables
Problem 9-2B (35 minutes)
Part 1
a. Expense is 2.5% of credit sales
Dec. 31 Bad Debts Expense………………………………………. 33,550
Allowance for Doubtful Accounts…………….. 33,550
To record estimated bad debts
[$1,342,000 x .025].
Part 2
Current assets
Accounts receivable.…………………………….. $575,000
Less allowance for doubtful accounts....... (41 ,050)* $533,950
Part 3
Current assets
Accounts receivable…………………………….... $575,000
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Chapter 09 – Accounting for Receivables
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Chapter 09 – Accounting for Receivables
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
Dec. 31 Bad Debts Expense……………………..…….………. 31,390
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 9-4B (35 minutes)
2014
a. Accounts Receivable………………………………..…. 685,350
Sales……………………………………………………… 685,350
To record sales on account.
Cost of Goods Sold……………………………….……….…….500,000
Merchandise Inventory……………………………………. 500,000
To record cost of sales.
*Beginning receivables….……........... $ 0
Credit sales………………………………... 685,350
Collections…………………………………. (482,300)
Write-offs………..………......…............. (9 ,350)
Ending receivables................…....... 193,700
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Chapter 09 – Accounting for Receivables
Problem 9-4B (Concluded)
2015
e. Accounts Receivable……………………………….…… 870,220
Sales………………………………………………..…….. 870,220
To record sales on account.
Cost of Goods Sold……………………………….……….…….650,000
Merchandise Inventory……………………………………. 650,000
To record cost of sales.
*Beginning receivables….…….…........….. $ 193,670
Credit sales…………………………………..…. 870,220
Collections………………………………………. (990,800)
Write-offs………..………......…................... (11,090)
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Chapter 09 – Accounting for Receivables
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.
Feb. 28 Notes Receivable—King Co……………………………… 12,600
Accounts Receivable—King Co…………........... 12,600
To record note received on account.
Mar. 1 Notes Receivable—M. Shelley………………….………. 6,200
Accounts Receivable—M. Shelley……………….. 6,200
To record note received on account.
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Chapter 09 – Accounting for Receivables
Problem 9-5B (Concluded)
June 15 Notes Receivable—R. Solon……….………….……… 2,000
Accounts Receivable—R. Solon..….……….….. 2,000
To record note received on account.
Sept. 19 Cash……………………………………………………………… 9,690
Interest Revenue*………………………..……….….. 190
Notes Receivable—J. Felton…..……….……….. 9,500
To record cash received on note plus interest.
*[$9,500 x .08 x 90/360] rounded to nearest dollar
Nov. 30 Allowance for Doubtful Accounts…………………… 12,684
Accounts Receivable—King Co……….……….. 12,684
To record write-off of accounts.
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
disclose this information in notes to its financial statements. This is a
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