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r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Merchandise
Inventory…………………………………..
5,535.
2
IncSt
RE
IncSt
RE
Sales Returns
……………………………………………………………….
90.2
2
Bad Debt Expense
…………………………………………………………
135.3
3
Less Ending Balance,
Total Returns and
………………………………………
£
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r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Solutions8-12
8.19 continued.
Journal Entries on January 1, 2013
Ca
sh…………………………………………………………………..
15,000,000
Assets = Liabilities +
Shareholders’
Equity (Class.)
The laptop sales meet the criteria for recognizing revenue
equaling
Assets = Liabilities +
Shareholders’
Equity (Class.)
Journal Entries on December 31, 2013
Advances from
Customer……………………………………..
2,343,
75
0
Cost of Training
Ser
v
ices
……………………………………..
1,250,00
0
Sales
Revenue………………………………………………..
2,343,75
0
Salaries
Payable…………………………………………….
1,250,00
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
8-13Solutions
.19 continued.
Journal Entries on December 31, 2014
Advances from
Customer……………………………………..
2,343,
75
0
Cost of Training
Ser
v
ices
……………………………………..
1,250,00
0
Sales
Revenue………………………………………………..
2,343,75
0
Salaries
Payable…………………………………………….
1,250,00
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.20 (Morrison’s Cafeteria; journal entries for coupons.) (amounts in
US$)
a. January
Ca
sh
………………………………………………………..
………
50,100
Sales Revenue
……………………………………………..
48,00
0
Coupon Liability
…………………………………………..
2,10
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+50,100 +2,100 –48,000
IncSt
RE
Coupon Liability ……………………………………………… 1,600
Sales Revenue ………………………………………………1,600
Assets = Liabilities +
Shareholders’
Equity (Class.)
–1,600 +1,600
IncSt
RE
February
………
Sales Revenue
………………………………………………
48,50
0
Coupon Liability
…………………………………………..
2,20
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+50,700 +2,200 –48,500
IncSt
RE
Solutions8-14
8.20 a. continued.
Coupon Liability ………………………………………………2,300
Sales Revenue ………………………………………………2,300
Assets = Liabilities +
Shareholders’
Equity (Class.)
–2,300 +2,300
IncSt
RE
March
Ca
sh
………………………………………………………..
………
52,400
Sales Revenue
………………………………………………
50,00
0
Coupon Liability
…………………………………………..
2,40
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+52,400 +2,400 +50,000
IncSt
RE
Coupon Liability ………………………………………………2,100
Sales Revenue ………………………………………………2,100
Assets = Liabilities +
Shareholders’
Equity (Class.)
IncSt
RE
IncSt
RE
8.21 (Abson Corporation; journal entries for service contracts.)
(amounts
in
US$)
a. 1/31/13–3/31/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
To record sale of 300 annual
contracts.
3/31/13
8-15Solutions
8.21 a. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
–32,000 –32,000
IncSt
RE
4/01/13–6/30/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+300,000 –300,000
To record the sale of 500 annual
contracts.
6/30/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
$
82,
500
Solutions8-16
8.21 a. continued.
4/01/13–6/30/13
Assets = Liabilities +
Shareholders’
Equity (Class.)
9/30/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
8.21 a. continued.
7/01/13–9/30/13
Assets = Liabilities +
Shareholders’
Equity (Class.)
b. Balances in Service Contract Fees Received in Advance Account:
January 1,
2013……………………………………………………………
—
Less First Quarter Expirations
……………………………………..
$
(22,500)
Plus First Quarter
S
a
l
e
s
……………………………………………….
18
0
,
00
0
March 31,
2013…………………………………………………………….
$
157,500
Less Second Quarter
Expirations
…………………………………..
(82,500
)
Plus Second Quarter Sales
……………………………………………
30
0
,
00
0
June 30, 2013
………………………………………………………………
$
375,000
Less Third Quarter Expirations
…………………………………….
(150,000
)
Plus Third Quarter
S
a
l
e
s
………………………………………………
24
0
,
00
0
September 30, 2013
……………………………………………………..
$
465,000
Less Fourth Quarter Expirations
…………………………………..
(195,000
)
Plus Fourth Quarter
S
a
l
e
s
…………………………………………….
12
0
,
00
0
December 31, 2013
……………………………………………………….
$
39
0
, 00
0
Balance OR
Contracts
X
Remainin
g
X
$600 = Amount
112,50
112,50
0
150,00
0
150,00
0
0
10
5
, 00
$
39
0
, 00
0
8.22 (Diversified Technologies; allowance method for uncollectible
accounts.) (amounts in US$)
Solutions8-18
8.22 continued.
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
b. Accounts Receivable Gross ($126,900 – $94,300 –
8.23 (York Company; aging of accounts receivable.) (amounts in US$)
Bad Debt Expe
ns
e ………………………………………………….. 9,050
Allowance for Uncollectible
Accounts
………………….. 9,050
Assets = Liabilities +
Shareholders’
Equity (Class.)
–9,050 –9,050
IncSt
RE
8.24 (Dove Company; aging of accounts receivable.)
(amounts in US$) Bad Debt
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
21,50
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
8-19Solutions
8.25 continued.
The Allowance account requires a balance of €75,100 [= (0.005 X
8.26 (Seward Corporation; reconstructing events when using the
allowance method.) (amounts in US$)
a. Accounts R
ecei
vab
l
e ………………………………………….
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
–4,800 –4,800
IncSt
RE
c. Allowance for Uncollectible Accounts ($8,700 +
Assets = Liabilities +
Shareholders’
Equity (Class.)
+4,400
–4,400
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
d. Cash ($82,900 + $240,000 – $4,400 – $87
,
300) ……. 231,200
Solutions8-20
8.27 (Pandora Company; allowance method: reconstructing journal
entry from events.) (amounts in US$)
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.28(Milton Corporation; allowance method: reconstructing journal
entries from events.) (amounts in US$)
Assets = Liabilities +
Shareholders’
Equity (Class.)
+75,000,000 +75,000,000
IncSt
RE
Assets = Liabilities +
Shareholders’
Equity (Class.)
+21,500 +21,500
IncSt
RE
Bad Debt Expe
ns
e ………………………………………………. 750,000
Allowance for Uncollectible
Accounts
……………….750,00
Assets = Liabilities +
Shareholders’
Equity (Class.)
–750,000 –750,000
IncSt
RE
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Solutions8-12
8.19 continued.
Journal Entries on January 1, 2013
Ca
sh…………………………………………………………………..
15,000,000
Assets = Liabilities +
Shareholders’
Equity (Class.)
The laptop sales meet the criteria for recognizing revenue
equaling
Assets = Liabilities +
Shareholders’
Equity (Class.)
Journal Entries on December 31, 2013
Advances from
Customer……………………………………..
2,343,
75
0
Cost of Training
Ser
v
ices
……………………………………..
1,250,00
0
Sales
Revenue………………………………………………..
2,343,75
0
Salaries
Payable…………………………………………….
1,250,00
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
8-13Solutions
.19 continued.
Journal Entries on December 31, 2014
Advances from
Customer……………………………………..
2,343,
75
0
Cost of Training
Ser
v
ices
……………………………………..
1,250,00
0
Sales
Revenue………………………………………………..
2,343,75
0
Salaries
Payable…………………………………………….
1,250,00
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.20 (Morrison’s Cafeteria; journal entries for coupons.) (amounts in
US$)
a. January
Ca
sh
………………………………………………………..
………
50,100
Sales Revenue
……………………………………………..
48,00
0
Coupon Liability
…………………………………………..
2,10
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+50,100 +2,100 –48,000
IncSt
RE
Coupon Liability ……………………………………………… 1,600
Sales Revenue ………………………………………………1,600
Assets = Liabilities +
Shareholders’
Equity (Class.)
–1,600 +1,600
IncSt
RE
February
………
Sales Revenue
………………………………………………
48,50
0
Coupon Liability
…………………………………………..
2,20
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+50,700 +2,200 –48,500
IncSt
RE
Solutions8-14
8.20 a. continued.
Coupon Liability ………………………………………………2,300
Sales Revenue ………………………………………………2,300
Assets = Liabilities +
Shareholders’
Equity (Class.)
–2,300 +2,300
IncSt
RE
March
Ca
sh
………………………………………………………..
………
52,400
Sales Revenue
………………………………………………
50,00
0
Coupon Liability
…………………………………………..
2,40
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+52,400 +2,400 +50,000
IncSt
RE
Coupon Liability ………………………………………………2,100
Sales Revenue ………………………………………………2,100
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.21 (Abson Corporation; journal entries for service contracts.)
(amounts
in
US$)
a. 1/31/13–3/31/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
To record sale of 300 annual
contracts.
3/31/13
8-15Solutions
8.21 a. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
–32,000 –32,000
IncSt
RE
4/01/13–6/30/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+300,000 –300,000
To record the sale of 500 annual
contracts.
6/30/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
$
82,
500
Solutions8-16
8.21 a. continued.
4/01/13–6/30/13
Assets = Liabilities +
Shareholders’
Equity (Class.)
9/30/13
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
8.21 a. continued.
7/01/13–9/30/13
Assets = Liabilities +
Shareholders’
Equity (Class.)
b. Balances in Service Contract Fees Received in Advance Account:
January 1,
2013……………………………………………………………
—
Less First Quarter Expirations
……………………………………..
$
(22,500)
Plus First Quarter
S
a
l
e
s
……………………………………………….
18
0
,
00
0
March 31,
2013…………………………………………………………….
$
157,500
Less Second Quarter
Expirations
…………………………………..
(82,500
)
Plus Second Quarter Sales
……………………………………………
30
0
,
00
0
June 30, 2013
………………………………………………………………
$
375,000
Less Third Quarter Expirations
…………………………………….
(150,000
)
Plus Third Quarter
S
a
l
e
s
………………………………………………
24
0
,
00
0
September 30, 2013
……………………………………………………..
$
465,000
Less Fourth Quarter Expirations
…………………………………..
(195,000
)
Plus Fourth Quarter
S
a
l
e
s
…………………………………………….
12
0
,
00
0
December 31, 2013
……………………………………………………….
$
39
0
, 00
0
Balance OR
Contracts
X
Remainin
g
X
$600 = Amount
10
5
, 00
$
39
0
, 00
0
8.22 (Diversified Technologies; allowance method for uncollectible
accounts.) (amounts in US$)
Solutions8-18
8.22 continued.
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
b. Accounts Receivable Gross ($126,900 – $94,300 –
8.23 (York Company; aging of accounts receivable.) (amounts in US$)
Bad Debt Expe
ns
e ………………………………………………….. 9,050
Allowance for Uncollectible
Accounts
………………….. 9,050
Assets = Liabilities +
Shareholders’
Equity (Class.)
–9,050 –9,050
IncSt
RE
8.24 (Dove Company; aging of accounts receivable.)
(amounts in US$) Bad Debt
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
21,50
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
8-19Solutions
8.25 continued.
The Allowance account requires a balance of €75,100 [= (0.005 X
8.26 (Seward Corporation; reconstructing events when using the
allowance method.) (amounts in US$)
a. Accounts R
ecei
vab
l
e ………………………………………….
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
–4,800 –4,800
IncSt
RE
c. Allowance for Uncollectible Accounts ($8,700 +
Assets = Liabilities +
Shareholders’
Equity (Class.)
+4,400
–4,400
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
d. Cash ($82,900 + $240,000 – $4,400 – $87
,
300) ……. 231,200
Solutions8-20
8.27 (Pandora Company; allowance method: reconstructing journal
entry from events.) (amounts in US$)
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.28(Milton Corporation; allowance method: reconstructing journal
entries from events.) (amounts in US$)
Assets = Liabilities +
Shareholders’
Equity (Class.)
+75,000,000 +75,000,000
IncSt
RE
Assets = Liabilities +
Shareholders’
Equity (Class.)
+21,500 +21,500
IncSt
RE
Bad Debt Expe
ns
e ………………………………………………. 750,000
Allowance for Uncollectible
Accounts
……………….750,00
Assets = Liabilities +
Shareholders’
Equity (Class.)
–750,000 –750,000
IncSt
RE
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)