Exercise 5-4 (LO 5-1, 5-2)
March 12 Debit Credit
Accounts Receivable 11,000
March 31
Cash 11,000
Exercise 5-5 (LO 5-1, 5-2)
March 12 Debit Credit
Service Fee Expense 11,000
March 31
Accounts Payable 11,000
Exercise 5-6 (LO 5-1, 5-2)
Requirement 1
April 25 Debit Credit
Accounts Receivable 3,500
Requirement 2
April 27 Debit Credit
Sales Allowances 600
Requirement 3
April 30 Debit Credit
Cash 2,900
Requirement 4
Service revenue $3,500
Less: Sales allowances (600)
Net sales $2,900
Exercise 5-7 (LO 5-3)
Requirement 1
December 31, 2015 Debit Credit
Bad Debt Expense 12,500
Requirement 2
Total accounts receivable $ 50,000
Less: Allowance for uncollectible accounts (12,500)
Exercise 5-8 (LO 5-3)
Requirement 1
December 31, 2015 Debit Credit
Bad Debt Expense 7,900
Requirement 2
Bad debt expense $7,900
Allowance for uncollectible accounts $9,000*
Requirement 3
Total accounts receivable $ 60,000
Less: Allowance for uncollectible accounts (9,000)
Exercise 5-9 (LO 5-3)
Requirement 1
December 31, 2015 Debit Credit
Bad Debt Expense 28,100
Requirement 2
Bad debt expense $28,100
Allowance for uncollectible accounts $26,000*
Requirement 3
Total accounts receivable $130,000
Less: Allowance for uncollectible accounts (26,000)
Exercise 5-10 (LO 5-4)
Requirement 1
Age Group
Amount
Receivable
Estimated
Percent
Uncollectible
Estimated
Amount
Uncollectible
Not yet due $50,000 20% $10,000
0-30 days past due 11,000 15% 1,650
Requirement 2
December 31, 2015 Debit Credit
Bad Debt Expense 14,700
Requirement 3
Total accounts receivable $ 70,000
Less: Allowance for uncollectible accounts (16,100)
Exercise 5-11 (LO 5-4)
Requirement 1
Age Group
Amount
Receivable
Estimated
Percent
Uncollectible
Estimated
Amount
Uncollectible
Not yet due $ 60,000 4% $ 2,400
0-60 days past due 26,000 20% 5,200
Requirement 2
December 31, 2015 Debit Credit
Bad Debt Expense 23,200
Requirement 3
Total accounts receivable $110,000
Less: Allowance for uncollectible accounts (19,200)
Exercise 5-12 (LO 5-3, 5-5)
Credit sales
transaction cycle Assets Liabilities
Stockholders’
equity Revenues Expenses
1. Provide services on
2. Estimate uncollectible
3. Write off accounts as
4. Collect on account
Exercise 5-13 (LO 5-6)
Requirement 1
a. Debit Credit
Accounts Receivable 190,000
b.
Cash 185,000
c.
Bad Debt Expense 4,650
d.
Allowance for Uncollectible Accounts 8,000
Requirement 2
a. Debit Credit
Accounts Receivable 190,000
b.
Cash 185,000
c.
No entry
d.
Bad Debt Expense 8,000
Exercise 5-13 (concluded)
Requirement 3
Bad Debt Expense
Allowance
Method
Direct Write-off
Method
2015: $4,650 $0
2016: $0 $8,000
Under the allowance method, we record bad debt expense in the period we
estimate the bad debts (2015). In 2015, $4,650 would be recorded for bad debt
expense under the allowance method only, so net income would be lower by
$4,650 under the allowance method compared to the direct write-off method.
Exercise 5-14 (LO 5-7)
a. April 1 Debit Credit
Notes Receivable 7,000
b. June 1
Notes Receivable 11,000
c. November 1
Notes Receivable 6,000
Exercise 5-15 (LO 5-7)
March 1 Debit Credit
Notes Receivable 11,000
September 1
Cash 11,495
Notes Receivable 11,000
Exercise 5-16 (LO 5-7)
March 1 Debit Credit
Legal Fees Expense 11,000
September 1
Notes Payable 11,000
Interest Expense 495