INTERMEDIATE ACCOUNTING HANDOUT PROBLEM7 Score Name Section Problem (10 points).

Question

INTERMEDIATE ACCOUNTING HANDOUT PROBLEM7 Score Name Section Problem (10 points). Sunflower Corporation had the following accounts, which had their normal balances, at the beginning of the fiscal year. SUNFLOWER CORPORATION BALANCES FOR ACCOUNTS RECEIVABLE AND RELATED ACCOUNTS AT BEGINNING OF FISCAL YEAR Accounts Receivable 420,000 Allowance For Doubtful Accounts 17.200 The company had the attached transactions that occurred during the current fiscal year. REQUIRED: (1) For each of the attached transactions, prepare the general journal entry, in proper general journal form, that should be made by the company to record the transaction. Use the letter of the transaction as the date. calculations to the nearest whole dollar. Omit explanations. Round all (2) Compute the ending balances in the Accounts Receivable and the Allowance For Doubtful Accounts at the end of the fiscal year.

Explanation / Answer

General Journal Date Account Titles and explanation Debit Credit (a) Accounts receivable $1,200,000 Sales $1,200,000 (To record sales on account) (b) Sales returns and allowances $62,000 Accounts receivable $62,000 (To record sales returns and allowances) .(c) Cash $1,015,000 Accounts receivable $1,015,000 (To record collection from customers) (d) Bad debt expense $23,400 Accounts receivable $23,400 (To recordwriting off accounts receivable) (e) Notes receivable $9,200 sales $9,200 ( To record receipt of notes receivable against sales) (f) Notes Receivable $42,000 Accounts receivable $42,000 (To record receipt of notes receivable against debt) (g) Cash $        9,407 (9200+207) Interest revenue $              207 (0.09*9200*(90/360) Notes receivable $9,200 (to record amounts of notes receivable and interest) (h) Accounts receivable $43,120 (42000+1120) Note receivable $42,000 Interest revenue $          1,120 (42000*0.08*(120/360) (To record default on notes receivable) (i) Cash $43,680 (43120+560) Account receivable $43,120 Interest revenue $              560 (42000*0.08*(60/360) (To record receipt of cash for notes on default) (j) Bad debt expense $            800 Allowances for doubtful accounts $              800 (1200000*0.015)-17200) (To record amount of allowances for doubtful debts)

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