Solutions Chapter 6 – Set B Exercises – Libby 7e
E6–1B.
Sales revenue ($950 + $710 + $420) …………………………………. $2,080
E6–2B.
Sales revenue ($4,500 + $12,000 +$4,000) ………………………… $20,500
E6–3B.
Sales revenue ($6,500 + $600 + $11,000) ………………………….. $18,100
E6–4B.
Cost of
Transaction
Net Sales
Goods Sold
Gross Profit
July 12
+ 294
+ 165
+ 129
July 15
E6–5B.
Req. 1 (Amount saved ÷ Amount paid) = Interest rate for 50 days.
Req. 2 Yes, because the 15% rate charged by the bank is less than the 30.44%
rate implicit in the discount. The company will save 15.44% by doing so (30.44%
– 15%).
E6–6B.
(a) Bad debt expense (+E, –SE) ($875,000 x 0.01) …….. 8,750
E6–7B.
(a) Bad debt expense (+E, –SE) ($879,000 x 0.02) …….. 17,580
(b) Allowance for doubtful accounts (–XA, +A) ………….. 436
E6–8B.
Aged accounts receivable
Estimated
amount
uncollectible
Not yet due
$18,000
x
=
$ 360
Over 120 days past due
x
=
E6–9B.
Req. 1
December 31, 2011-Adjusting entry:
Bad debt expense (+E, –SE) ………………………………… 5,610
Allowance for doubtful accounts (+XA, –A) ……. 5,610
Not yet due
$65,000
x
=
$ 1,950
Up to 180 days past due
17,000
x
=
2,040
Req. 2
Balance sheet:
Accounts receivable ($65,000 + $17,000 + $6,000) $88,000
E6–10B.
Req. 1 JENNA COMPANY
Bank Reconciliation
June 30, 2011
Company’s Books
Bank Statement
Ending balance per Cash
account ………………………
$6,700
Ending balance per bank
statement ……………………
$7,560
Additions:
Additions:
None
Deposit in transit* ………
2,200*
9,760
Deductions:
Deductions:
Correct cash balance …….
$6,260
Correct cash balance …….
Req. 2
(1) Bank service charge expense (+E, –SE) ………………………….. 70
Cash (–A) …………………………………………………………… 70
Req. 3
Same as the correct balance on the reconciliation, $6,260.
Req. 4