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Exercise 5-14 (LO 5-7)
a. April 1
Debit
Credit
Notes Receivable
7,000
Service Revenue
7,000
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
Chapter 5 - Receivables and Sales
Exercise 5-17 (LO 5-7)
Requirement 1
April 1, 2018
Debit
Credit
Notes Receivable
600,000
Requirement 2
December 31, 2018
Debit
Credit
Interest Receivable
49,500
Requirement 3
April 1, 2019
Debit
Credit
Cash
666,000
Notes Receivable
600,000
Exercise 5-18 (LO 5-8)
WalCo
TarMart
CostGet
Receivables
turnover
=
Net sales
$322,427
$67,878
$68,963
Average
($1,815 +
($6,166 +
($629 +
Average
collection
=
365
365
365
365
Receivables
140.9
10.6
106.6
Exercise 5-19 (LO 5-9)
Requirement 1
December 31, 2018
Debit
Credit
Bad Debt Expense
5,500
Requirement 2
December 31, 2018
Debit
Credit
Bad Debt Expense
7,800
Requirement 3
Percentage of
receivables
method
Percentage of
credit sales
method
5-26 Financial Accounting, 3e
Exercise 5-20 (LO 5-9)
Requirement 1
December 31, 2018
Debit
Credit
Bad Debt Expense
7,700
Allowance for Uncollectible Accounts
7,700
Chapter 5 - Receivables and Sales
Exercise 5-21
Requirement 1
January 2
Debit
Credit
Cash
35,100
Service Revenue
35,100
(Provide services for cash)
January 6
Debit
Credit
Accounts Receivable
72,400
Exercise 5-21 (continued)
Requirement 2
(a) January 31
Debit
Credit
Bad Debt Expense
1,100
Allowance for Uncollectible Accounts
1,100
Exercise 5-21 (continued)
Requirement 3
3D Family Fireworks
Adjusted Trial Balance
January 31, 2018
Accounts
Debit
Credit
Cash
$78,400
Accounts Receivable
15,000
5-30 Financial Accounting, 3e
Exercise 5-21 (continued)
Requirement 3 (continued)
Accounts
Ending
Balance
Beginning balance in bold, entries during
January in blue, and adjusting entries in red.
Cash
78,400
=
23,900+35,100+70,000−31,400−5,500−13,700
Chapter 5 - Receivables and Sales
Exercise 5-21 (continued)
Requirement 4
3D Family Fireworks
Income Statement
For the year ended January 31, 2018
Revenues:
Service revenue
$107,500
Interest revenue
100
Requirement 5
3D Family Fireworks
Balance Sheet
January 31, 2018
Assets
Liabilities
Cash
$ 78,400
Accounts payable
$ 1,700
Accounts receivable
$15,000
Salaries payable
33,500
Exercise 5-21 (concluded)
Requirement 6
January 31, 2018
Debit
Credit
Service Revenue
107,500
Interest Revenue
100
Requirement 7
(a) The receivables turnover ratio is:
Receivables
Net credit sales
$72,400
(b) The ratio at the end of January is:
Allowance for Uncollectible
Accounts
=
$1,500
=
10%
Chapter 5 - Receivables and Sales
PROBLEMS: SET A
Problem 5-1A (LO 5-1)
Revenue recognized in 2018
Scenario 1:
$11,000
Problem 5-2A (LO 5-1, 5-2)
Requirement 1
May 2
Debit
Credit
No entry
May 7
Requirement 2
Outdoor Expo
Partial Income Statement
Problem 5-3A (LO 5-3, 5-5)
Requirement 1
June 12, 2018
Debit
Credit
Accounts Receivable
41,000
Service Revenue
41,000
March 4, 2019
Accounts Receivable
56,000
Service Revenue
56,000
(Provide services on account)
May 20, 2019
(Receive cash on account)
December 31, 2019
Problem 5-3A (concluded)
Requirement 2
Cash
Accounts Receivable
25,000
41,000
25,000
Dec. 31, 2018
25,000
Dec. 31, 2018
16,000
Requirement 3
2018
2019
Chapter 5 - Receivables and Sales
Problem 5-4A (LO 5-4, 5-5)
Requirement 1
Age group
Amount
receivable
Estimated
percent
uncollectible
Estimated
amount
uncollectible
Not yet due
$40,000
4%
$ 1,600
Requirement 2
December 31, 2018
Debit
Credit
Bad Debt Expense
12,950
Requirement 3
July 19, 2019
5-38 Financial Accounting, 3e
Problem 5-5A (LO 5-3, 5-6)
Requirement 1
Arnold should not use the direct write-off method. Even if no accounts are known to
Requirement 2
Chapter 5 - Receivables and Sales
Problem 5-6A (LO 5-3)
Requirement 1
Debit
Credit
Bad Debt Expense
59,000
Requirement 2
Requirement 3
Debit
Credit
Bad Debt Expense
26,000
Requirement 4
Problem 5-7A (LO 5-3, 5-5)
Requirement 1
December 31, 2018
Debit
Credit
Bad Debt Expense
455,000
Requirement 2
Because actual bad debts in 2019 were only $300,000 when the company estimated
