This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CHAPTER 8
SOLUTIONS TO PROBLEMS—SET C
(a) Total estimated bad debts
Number of Days Outstanding
Total
0–30
31–60
61–90
91–120
Over 120
(b) Bad Debt Expense ............................................... 9,890
(c) Allowance for Doubtful Accounts ...................... 2,600
(d) Accounts Receivable ........................................... 1,200
Allowance for Doubtful Accounts ............... 1,200
PROBLEM 8-1C
PROBLEM 8-2C
(a) 1. Accounts Receivable ................................. 3,600,000
Sales Revenue ..................................... 3,600,000
2. Sales Returns and Allowances .................. 50,000
Accounts Receivable .......................... 50,000
4. Allowance for Doubtful Accounts .............. 92,000
Accounts Receivable .......................... 92,000
(b) Accounts Receivable Allowance for Doubtful Accounts
Bal. 960,000 (2) 50,000 (4) 92,000 Bal. 78,000
(5) 28,000 (4) 92,000 Bal. 14,000
(c) Balance needed .................................................... $109,000
Balance before adjustment [see (b)] ................... 14,000
PROBLEM 8-2C (Continued)
(d)
$3,600,000 –$50,000
($882,000*+ $1,209,000**)÷2=$3,550,000
$1,045,500 = 3.4 times
PROBLEM 8-3C
(a) Dec. 31 Bad Debt Expense ....................................... 26,210
(a) & (b)
Bad Debt Expense Allowance for Doubtful Accounts
12/31 26,210 2013 12/31 Bal. 11,700
(b) 2014
(1) Mar. 31 Allowance for Doubtful Accounts ...... 500
Accounts Receivable ................... 500
(2) May 31 Accounts Receivable ........................... 500
Allowance for Doubtful
Accounts ................................... 500
PROBLEM 8-4C
(a) $15,000.
(b) $12,300 [($400,000 X 4%) – $3,700].
PROBLEM 8-5C
(a) The allowance method is being used by Seidl. Since the balance in
the allowance for doubtful accounts is given, it must be using this
method because the account would not exist if it were using the direct
write-off method.
(b) Dec. 31 Bad Debt Expense ($26,000 – $4,800) ....... 21,200
Allowance for Doubtful Accounts ....... 21,200
PROBLEM 8-6C
Jan. 5 Accounts Receivable—Flint Company .......... 10,000
Sales Revenue ........................................... 10,000
20 Notes Receivable ............................................. 10,000
Accounts Receivable—Flint Company ... 10,000
May 25 Notes Receivable ............................................. 9,000
Accounts Receivable—Aberd Inc ............ 9,000
Aug. 18 Cash ($4,000 + $160) ........................................ 4,160
Notes Receivable ...................................... 4,000
Interest Revenue
($4,000 X 8% X 6/12) ............................... 160
PROBLEM 8-7C
(a)
Transaction
Accounts
Receivable
Turnover
(6X)
Average
Collection
Period
(61 days)
2.
Collected amounts owed by
customers.
I
D
3.
Wrote off an account receivable
5.
Recorded bad debt expense for the
year using the allowance method.
I
D
(b) There are three reasons why companies sell their receivables:
• Large companies encourage sales of their products by providing
financing to their customers. These companies do not want to manage
PROBLEM 8-8C
(a) Oct. 7 Accounts Receivable ............................ 4,600
Sales Revenue ................................. 4,600
12 Cash ($600 – $18) .................................. 582
Service Charge Expense
(b)
Notes Receivable Interest Receivable
10/1 Bal. 18,800 10/15 6,000 10/31 49
PROBLEM 8-8C (Continued)
BROCKMAN COMPANY
Balance Sheet (Partial)
October 31, 201X
(c) Current assets
Notes receivable ..................................................... $ 9,800
PROBLEM 8-9C
Intel AMD
Accounts receivable
turnover
$35,127
($1,712a+ $2,273b)÷2
$5,403
($320c+$745d)÷ 2
Trusted by Thousands of
Students
Here are what students say about us.
Resources
Company
Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.