Exercise 5-31B, Obj. 2, 3, 4
Student Name
Course Name
Student ID:
Date:
Financial Accounting
Students: Please fill-in areas that are
shaded. This template uses drop-
down menus to select accounts.
Apply GAAP for revenue recognition, accounts receivable, and
uncollectible receivables
On June 30, Malony Party Planners had a $43,000 balance in Accounts Receivable and a $2,493 credit balance
in Allowance for Uncollectible Accounts. During July, Malony made credit sales of $200,000. July collections on
account were $169,000, and write-offs of uncollectible receivables totaled $2,910. Uncollectible-accounts
expense is estimated as 1% of credit sales. No sales returns are expected.
Exercise 5-31B
Instructions
1.
2.
3.
Requirement 1
ACCOUNT TITLES AND EXPLANATION
DEBIT CREDIT
July
July
July
July
Test Your Knowledge
Journalize sales, collections, write-offs of uncollectibles, and uncollectible-accounts expense
by the allowance method during December. Explanations are not required.
Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and
Net Accounts Receivable at July 31. How much does Malony expect to collect?
Show how Malony Party Planners will report accounts receivable and net sales on its July 31 balance
sheet and income statement for the month ended July 31..
DATE
Requirement 2
Bal. Bal. FORMULA
How much does the store expect to collect?
Requirement 3
BALANCE SHEET (Partial)
Current assets:
Amount
Amount
Amount
INCOME STATEMENT (Partial)
Amount
Less:
Accounts Receivable
Allowance for Uncollectible Accounts
Exercise 5-31B, Obj. 2, 3, 4
Student Name
Course Name
Student ID:
Date:
Financial Accounting
On June 30, Malony Party Planners had a $43,000 balance in Accounts Receivable and a $2,493 credit balance
in Allowance for Uncollectible Accounts. During July, Malony made credit sales of $200,000. July collections on
account were $169,000, and write-offs of uncollectible receivables totaled $2,910. Uncollectible-accounts
expense is estimated as 1% of credit sales. No sales returns are expected.
Students: Please fill-in areas that are
shaded. This template uses drop-
down menus to select accounts.
Apply GAAP for revenue recognition, accounts receivable, and
uncollectible receivables
Exercise 5-31B
Instructions
1.
2.
3.
Requirement 1
ACCOUNT TITLES AND EXPLANATION
DEBIT CREDIT
July 200,000
200,000
Test Your Knowledge
Journalize sales, collections, write-offs of uncollectibles, and uncollectible-accounts expense
by the allowance method during December. Explanations are not required.
Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and
Net Accounts Receivable at July 31. How much does Malony expect to collect?
Show how Malony Party Planners will report accounts receivable and net sales on its July 31 balance
sheet and income statement for the month ended July 31..
DATE
Accounts Receivable
Sales Revenue
Accounts Receivable
Accounts Receivable
Allowance for Uncollectable Accounts
Uncollectable-Account Expense
Allowance for Uncollectable Accounts
Requirement 2
169,000 2,493
Accounts Receivable
Allowance for Uncollectible Accounts
Exercise 5-32B, Obj. 4
Student Name
Course Name
Student ID:
Date:
Total Balance
1-30 Days 31-60 Days 61-90 Days Over 90 Days
$180,000 130,000 100,000 60,000 30,000
Estimated uncollectible 0.40% 5.00% 7.00% 60%
Students: Please fill-in areas that are
shaded.
Apply GAAP to uncollectible receivables
Financial Accounting
At December 31,2016, before any year-end adjustments, the Accounts Receivable balance of Foley Distribution
Service is $180,000. The Allowance for Doubtful Accounts has an $22,200 credit balance. Foley Distribution
Service prepares the following aging schedule for Accounts Receivable:
Age of Accounts
Exercise 5-32B
Instructions
1.
2.
3.
Requirement 1
Hint: Calculate account balance based on aging and compare to current balance.
Requirement 2
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
31-Dec
22,200
5,520
27,720
Requirement 3
BALANCE SHEET
Current assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ XX
Short-term investments . . . . . . . . . . . . . . . XX
Or
*Another way to report accounts receivable is
Make the entry required by the aging schedule. Prepare a T-account for the allowance.
Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance
account adequate? Too high? Too low?
Test Your Knowledge
Show how Foley Distribution Service will report Accounts Receivable on its December 31
balance sheet.
Enter explanation here.
DATE
Allowance for Doubtful
Accounts
Exercise 5-32B, Obj. 4
Student Name
Course Name
Student ID:
Date:
Total Balance
1-30 Days 31-60 Days 61-90 Days Over 90 Days
$180,000 130,000 100,000 60,000 30,000
Estimated uncollectible 0.40% 5.00% 7.00% 60%
Financial Accounting
At December 31,2016, before any year-end adjustments, the Accounts Receivable balance of Foley Distribution
Service is $180,000. The Allowance for Doubtful Accounts has an $22,200 credit balance. Foley Distribution
Service prepares the following aging schedule for Accounts Receivable:
Age of Accounts
Students: Please fill-in areas that are
shaded.
Apply GAAP to uncollectible receivables
Exercise 5-32B
Instructions
1.
2.
3.
Requirement 1
Hint: Calculate account balance based on aging and compare to current balance.
Requirement 2
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
Make the entry required by the aging schedule. Prepare a T-account for the allowance.
Show how Foley Distribution Service will report Accounts Receivable on its December 31
balance sheet.
DATE
Test Your Knowledge
Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance
account adequate? Too high? Too low?
Short-term investments . . . . . . . . . . . . . . . XX
Accounts Receivable
Less: Allowance for doubtful accounts
Doubtful-Account Expense
Problem 5-53A, Obj. 1
Student Name
Course Name
Student ID:
Date:
Nov. 16 Purchased 900 common shares as an investment in trading securities,
paying $9 per share.
Dec. 16 Received cash dividend of $0.35 per share on the trading securities.
Dec. 31 Adjusted the trading securities to market value of $5 per share.
Financial Accounting
During the fourth quarter of 2016, Abbott, Inc., generated excess cash, which the company invested in trading
securities as follows:
Students: Please fill-in areas that are
shaded.
Apply GAAP to short-term investments
Problem 5-53A
Instructions
1.
2. Journalize the foregoing transactions and post to the T-accounts.
3. Show how to report the short-term investment on Abbott’s balance sheet at December 31, 2016.
4. Show how to report whatever should appear on Abbott’s income statement for the year ended
December 31, 2016.
5. Abbott sold the trading securities for $6,300 on January 14, 2017. Journalize the sale.
6. Assume that the securities were classified as available-for-sale. Further, assume that the fair value
was $10 per share on December 31, 2017, and $10.50 per share on January 1, 2018,
when they were sold. Repeat steps 3-4 for 2016 and 2017, and journalize the sale
of the securities on January 1, 2018. Follow the example in Exhibit 5-2.
Requirements 1 and 2
19,000
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
2016
Nov. 16
Enter j.e. explanation.
Dec. 16
Enter j.e. explanation.
Dec. 31
Enter j.e. explanation.
Open T-accounts for Cash (including its beginning balance of $19,000), Short-Term
Investments, Dividend Revenue, and Unrealized Gain (Loss) on Investment.
Test Your Knowledge
Cash
Short Term Investments
Dividend Revenue
Unrealized Loss on Investment
Journal
DATE
Problem 5-53A
Requirement 3
BALANCE SHEET
CURRENT ASSETS:
Account name here
Requirement 4
INCOME STATEMENT
Heading here
Account name here
Account name here
Requirement 5
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
2017
Jan. 14
Enter journal entry explanation here.
Requirement 6
BALANCE SHEET
31-Dec 31-Dec
CURRENT ASSETS: 2017 2016
Account name here
STOCKHOLDERS’ EQUITY:
INCOME STATEMENT
Heading here
Account name here
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
2018
Jan. 1
Enter journal entry explanation here.
Journal
DATE
DATE
Journal
Problem 5-53A, Obj. 1
Student Name
Course Name
Student ID:
Date:
Nov. 16 Purchased 900 common shares as an investment in trading securities,
paying $9 per share.
Dec. 16 Received cash dividend of $0.35 per share on the trading securities.
Dec. 31 Adjusted the trading securities to market value of $5 per share.
Financial Accounting
During the fourth quarter of 2016, Abbott, Inc., generated excess cash, which the company invested in trading
securities as follows:
Students: Please fill-in areas that are
shaded.
Apply GAAP to short-term investments
Problem 5-53A
Instructions
1.
2. Journalize the foregoing transactions and post to the T-accounts.
3. Show how to report the short-term investment on Abbott’s balance sheet at December 31, 2016.
4. Show how to report whatever should appear on Abbott’s income statement for the year ended
December 31, 2016.
5. Abbott sold the trading securities for $6,300 on January 14, 2017. Journalize the sale.
6. Assume that the securities were classified as available-for-sale. Further, assume that the fair value
was $10 per share on December 31, 2017, and $10.50 per share on January 1, 2018,
when they were sold. Repeat steps 3-4 for 2016 and 2017, and journalize the sale
of the securities on January 1, 2018. Follow the example in Exhibit 5-2.
Requirements 1 and 2
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
Investment in Trading Securities
2016
Test Your Knowledge
Open T-accounts for Cash (including its beginning balance of $19,000), Short-Term
Investments, Dividend Revenue, and Unrealized Gain (Loss) on Investment.
Dividend Revenue
Unrealized Loss on Investment
Journal
DATE
Cash
Short-Term Investment
Problem 5-53A
Requirement 3
BALANCE SHEET
CURRENT ASSETS:
Requirement 4
INCOME STATEMENT
Requirement 5
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
Requirement 6
BALANCE SHEET
31-Dec 31-Dec
CURRENT ASSETS: 2017 2016
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
Journal
DATE
Journal
DATE
Problem 5-58A, Obj. 4
Student Name
Course Name
Student ID:
Date:
2016
Oct. 31 Sold goods to Bilo’s Foods, receiving a $36,000, three-month, 4.5% note.
(You do not need to make the cost of goods sold journal entry for this transaction.)
Dec. 31 Made an adjusting entry to accrue interest on the Bilo’s Foods note.
2017
Jan. 31 Collected the Bilo’s Foods note.
Feb. 18 Received a 90-day, 7.00%, $7,000 note from Dutton Market on account.
Feb. 19 Sold the Dutton Market note to Seabrook Bank, receiving cash of
$6,800. (Debit the difference to financing expense.)
Nov. 11 Loaned $15,600 cash to Sauble Co., receiving a 90-day, 9.50% note.
Dec. 31 Accrued the interest on the Sauble Co. note.
Financial Accounting
Hughes Foods completed the following selected transactions.
Students: Please fill-in areas that are shaded.
Apply GAAP for notes receivable
Problem 5-58A
Instructions
1. Record the transactions in Hughes Foods’ journal. Round interest amounts to the nearest dollar.
Explanations are not required.
2. Show what Hughes Foods will report on its comparative classified balance sheet at December 31,
2017, and December 31, 2016.
Requirement 1
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
2016
Oct. 31
Dec. 31
2017
Jan. 31
Feb. 18
Feb. 19
Nov. 11
Dec. 31
Requirement 2
BALANCE SHEET 2017 2016
Current assets:
Note receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
Test Your Knowledge
Journal
DATE
Problem 5-58A, Obj. 4
Student Name
Course Name
Student ID:
Date:
2016
Oct. 31 Sold goods to Bilo’s Foods, receiving a $36,000, three-month, 4.5% note.
(You do not need to make the cost of goods sold journal entry for this transaction.)
Dec. 31 Made an adjusting entry to accrue interest on the Bilo’s Foods note.
2017
Jan. 31 Collected the Bilo’s Foods note.
Feb. 18 Received a 90-day, 7.00%, $7,000 note from Dutton Market on account.
Feb. 19 Sold the Dutton Market note to Seabrook Bank, receiving cash of
$6,800. (Debit the difference to financing expense.)
Nov. 11 Loaned $15,600 cash to Sauble Co., receiving a 90-day, 9.50% note.
Dec. 31 Accrued the interest on the Sauble Co. note.
Financial Accounting
Hughes Foods completed the following selected transactions.
Students: Please fill-in areas that are shaded.
Apply GAAP for notes receivable
Problem 5-58A
Instructions
1. Record the transactions in Hughes Foods’ journal. Round interest amounts to the nearest dollar.
Explanations are not required.
2. Show what Hughes Foods will report on its comparative classified balance sheet at December 31,
2017, and December 31, 2016.
Requirement 1
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
Test Your Knowledge
Journal
DATE