Exercise 7–5
Requirement 1
November 17, 2018
November 26, 2018
Requirement 2
November 17, 2018
December 15, 2018
Solutions Manual, Vol.1, Chapter 7 7–1
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Exercise 7–5 (concluded)
Requirement 3
Requirement 1, using the net method:
November 17, 2018
November 26, 2018
Requirement 2, using the net method:
November 17, 2018
December 15, 2018
………………………………………………..Accounts receivable
………………………………………….Sales discounts forfeited
Solutions Manual, Vol.1, Chapter 7 7–2
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McGraw-Hill Education.
Exercise 7–6
Requirement 1
July 15, 2018
…………………………………………………………Sales revenue
July 23, 2018
………………………………………………..Accounts receivable
Requirement 2
July 15, 2018
…………………………………………………………Sales revenue
Aug. 15, 2018
………………………………………………..Accounts receivable
Solutions Manual, Vol.1, Chapter 7 7–3
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McGraw-Hill Education.
Exercise 7–7
Requirement 1
July 15, 2018
July 23, 2018
………………………………………………..Accounts receivable
Requirement 2
July 15, 2018
August 15, 2018
………………………………………………..Accounts receivable
………………………………………….Sales discounts forfeited
Solutions Manual, Vol.1, Chapter 7 7–4
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McGraw-Hill Education.
Exercise 7–8
Requirement 1
To record the actual sales returns
Sales returns………………………………………………………….. 450,000
………………………………………………..Accounts receivable
December 31, 2018 To record the estimated sales returns
…………………………………….Allowance for sales returns
…………………………………………………………………………10,000
Requirement 2
Beginning balance in allowance account $300,000
Solutions Manual, Vol.1, Chapter 7 7–5
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McGraw-Hill Education.
Exercise 7–9
Requirement 1
The specific citation that specifies these disclosure policies is FASB ACS
and Trade Receivables.”
Requirement 2
FASB ACS 310–10–50–2 reads as follows:
“The summary of significant accounting policies shall include the following:
a. The basis for accounting for loans and trade receivables
b. The method used in determining the lower of cost or fair value of
nonmortgage loans held for sale (that is, aggregate or individual asset basis)
c. The classification and method of accounting for interest-only strips, loans,
d. The method for recognizing interest income on loan and trade receivables,
Solutions Manual, Vol.1, Chapter 7 7–6
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McGraw-Hill Education.
Exercise 7–10
Requirement 1
Requirement 2
Allowance for uncollectible accounts
Balance, beginning of year $42,000
Requirement 3
$69,500 — the amount of accounts receivable written off.
Solutions Manual, Vol.1, Chapter 7 7–7
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McGraw-Hill Education.
Exercise 7–11
Requirement 1
To record the write-off of receivables:
………………………………………………..Accounts receivable
To reinstate an account previously written off and to record the collection:
………………………..Allowance for uncollectible accounts
………………………………………………..Accounts receivable
Allowance for uncollectible accounts:
Balance, beginning of year $32,000
To record bad debt expense for the year:
………………………..Allowance for uncollectible accounts
Requirement 2
Solutions Manual, Vol.1, Chapter 7 7–8
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McGraw-Hill Education.
Current assets:
Accounts receivable, net of $62,500 allowance
Exercise 7–12
Using the direct write-off method, bad debt expense is equal to actual write-offs.
Collections of previously written-off receivables are recorded as revenue.
Allowance for uncollectible accounts:
Balance, beginning of year $17,280
Exercise 7–13
Allowance for uncollectible accounts:
Balance, beginning of year $21.0
Accounts receivable analysis:
Balance, beginning of year $ 1,504.6
($1,483.6 + 21.0)
Add: Credit sales 17,630.3
Less: Write-offs* (15.5)
Solutions Manual, Vol.1, Chapter 7 7–9
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McGraw-Hill Education.
Allowance
17,280 Beginning balance
2,200 Reinstated
20,030 Bad debt expense (plug)
17,100 Writeoffs
22,410 Ending balance
Allowance
21.0
Gross A/R
1,504.6
17,630.3 15.5
collections
1,412.0
Solutions Manual, Vol.1, Chapter 7 7–10
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McGraw-Hill Education.
Exercise 7–14
Requirement 1
June 30, 2018
…………………………………………………………Sales revenue
December 31, 2018
March 31, 2019
……………………Interest receivable (accrued at December 31)
……………………………………………………..Note receivable
Requirement 2
Solutions Manual, Vol.1, Chapter 7 7–11
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McGraw-Hill Education.