Feb.
3.
Sold merchandise on account to Dr. Jill Hall, $18,040. The cost of the merchandise sold was $9,550.
Sept.
10.
Received $5,010 from Dr. Jill Hall and wrote off the remainder owed on the sale of February 3 as uncollectible.
Dec.
21.
Reinstated the account of Dr. Jill Hall that had been written off on September 10 and received $13,030 cash in full payment.
Journalize the above transactions in the accounts of Midwest Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Midwest Medical Co.
General Ledger
ASSETS
110
Cash
111
Petty Cash
121
Accounts Receivable-Dr. Jill Hall
129
Allowance for Doubtful Accounts
131
Interest Receivable
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
Journalize the transactions in the accounts of Midwest Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
10
11
Apr.
2.
Sold merchandise on account to Peking Palace Co., $37,940. The cost of the merchandise sold was $25,700.
June
9.
Received $9,050 from Peking Palace Co. and wrote off the remainder owed on the sale of April 2 as uncollectible.
Oct.
31.
Reinstated the account of Peking Palace Co. that had been written off on June 9 and received $28,890 cash in full payment.
Journalize the above transactions in the accounts of Dining Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Dining Interiors Company
General Ledger
ASSETS
110
Cash
111
Petty Cash
121
Accounts Receivable-Peking Palace Co.
129
Allowance for Doubtful Accounts
131
Interest Receivable
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
Journalize the transactions in the accounts of Dining Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
10
11
Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8.
Waddell Industries
Estimate the allowance for doubtful accounts
1
Days Past Due
Days Past Due
Days Past Due
Days Past Due
2
Balance
Not Past Due
1-30
31-60
61-90
Over 90
3
Total receivables
1,150,100.00
618,800.00
233,100.00
118,000.00
105,800.00
74,400.00
4
Percentage uncollectible
3.0%
4.0%
15.0%
33.0%
86.0%
5
Allowance for doubtful accounts
Waddell Industries has computed that the proper balance for the Allowance for Doubtful Accounts at August 31 is $140,434. Assume that the allowance for doubtful accounts for Waddell Industries has a credit balance of $6,971 before adjustment on August 31.
Journalize the adjusting entry for uncollectible accounts as of August 31. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Waddell Industries
General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
129
Allowance for Doubtful Accounts
131
Interest Receivable
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
Journalize the adjusting entry for uncollectible accounts as of August 31. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
Selby’s Bike Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2016, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Age Interval
Balance
Percent Uncollectible
Not past due
$1,300,000
0.65%
1 – 30 days past due
482,900
4
31 – 60 days past due
178,500
8
61 – 90 days past due
56,900
13
91 – 180 days past due
36,200
37
Over 180 days past due
23,700
83
$2,078,200
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2016.
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2016.
Estimated Uncollectible Accounts
Age Interval
Balance
Percent
Amount
Not past due
$1,300,000
0.65%
1 – 30 days past due
482,900
4%
31 – 60 days past due
178,500
8%
61 – 90 days past due
56,900
13%
91 – 180 days past due
36,200
37%
Over 180 days past due
23,700
83%
Total
$2,078,200
Selby’s Bike Co. has determined that the proper balance for the Allowance for Doubtful Accounts at December 31 is $80,574. Assume that the allowance for doubtful accounts for Selby’s Bike Co. had a debit balance of $7,880 as of December 31, 2016.
Journalize the adjusting entry for uncollectible accounts as of December 31, 2016. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Selby’s Bike Co.General Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
129
Allowance for Doubtful Accounts
131
Interest Receivable
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
Journalize the adjusting entry for uncollectible accounts as of December 31, 2016. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
Master Designs Decorators issued a 180-day, 7% note for $65,400, dated May 14, 2016, to Morgan Furniture Company on account.
Required:
A.
Determine the due date of the note.
B.
Determine the maturity value of the note.
C.
Journalize the entries to record the following: (1) receipt of the note by Morgan Furniture and (2) receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Morgan Furniture Company
General Ledger
ASSETS
110
Cash
111
Petty Cash
121
Accounts Receivable-Master Designs Decorators
129
Allowance for Doubtful Accounts
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
C. (1) Journalize the entry to record the receipt of the note by Morgan Furniture. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
C. (2) Journalize the entry to record the receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
Apr.
18.
Received a $51,600, 30-day, 6% note dated April 18 from Glenn Cross on account.
30.
Received a $36,000, 60-day, 8% note dated April 30 from Rhoni Melville on account.
May
18.
The note dated April 18 from Glenn Cross is dishonored, and the customer’s account is charged for the note, including interest.
June
29.
The note dated April 30 from Rhoni Melville is dishonored, and the customer’s account is charged for the note, including interest.
Aug.
16.
Cash is received for the amount due on the dishonored note dated April 18 plus interest for 90 days at 8% on the total amount debited to Glenn Cross on May 18.
Oct.
22.
Wrote off against the allowance account the amount charged to Rhoni Melville on June 29 for the dishonored note dated April 30.
Journalize the above transactions in the accounts of Safari Games Co., which operates a riverboat casino. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Safari Games Co.
General Ledger
ASSETS
110
Cash
111
Petty Cash
121
Accounts Receivable-Glenn Cross
122
Accounts Receivable-Rhoni Melville
129
Allowance for Doubtful Accounts
131
Interest Receivable
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
Journalize the transactions in the accounts of Safari Games Co., which operates a riverboat casino. Refer to the Chart of Accounts for exact wording of account titles. Round all computations to the whole dollar.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
June
2.
Received $1,110 from Melissa Crone and wrote off the remainder owed of $4,260 as uncollectible.
Oct.
9.
Reinstated the account of Melissa Crone and received $4,260 cash in full payment.
Journalize the above transactions, using the direct write-off method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSGeneral Ledger
ASSETS
110
Cash
111
Petty Cash
121
Accounts Receivable-Melissa Crone
129
Allowance for Doubtful Accounts
131
Interest Receivable
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
Journalize the transactions, using the direct write-off method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
Guzman Company received a 60-day, 6% note for $28,000 dated July 12 from a customer on account.
Required:
a. Determine the due date of the note.
b. Determine the maturity value of the note.
c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSGuzman CompanyGeneral Ledger
ASSETS
110
Cash
111
Petty Cash
120
Accounts Receivable
129
Allowance for Doubtful Accounts
132
Notes Receivable
141
Merchandise Inventory
145
Office Supplies
146
Store Supplies
151
Prepaid Insurance
181
Land
191
Store Equipment
192
Accumulated Depreciation-Store Equipment
193
Office Equipment
194
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable
214
Interest Payable
215
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Advertising Expense
522
Depreciation Expense-Store Equipment
523
Delivery Expense
524
Repairs Expense
529
Selling Expenses
530
Office Salaries Expense
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Office Supplies Expense
535
Store Supplies Expense
536
Credit Card Expense
537
Cash Short and Over
538
Bad Debt Expense
539
Miscellaneous Expense
710
Interest Expense
c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3