Receivables 52 ting for uncollectible accounts (aging-of-receivables method), Le
ID: 2557679 • Letter: R
Question
Receivables 52 ting for uncollectible accounts (aging-of-receivables method), Learnig eivable, and accrued interest revenue er Chairs completed the following selected transactions Sierpy Reeiner Chaironteress Dec. 31, 2018 Interest Receivab $1,640 2018 andise inventory to Stan-Mart, receiving a $41,000, nine-month, 8% cash sales for the period of $24,000. Ignore Cost of Goods Sold adjusting entry to record bad debts expense based on an aging invento , 1 Sold ote. Ignore Cost of Goods Sold. oct. 31 Recorded pec n adjusting entry to accrue interest on the Stan-Mart note. 1s receivable. The aging schedule shows that $13,800 of accounts Made an adjusting entry to of accounts eivablwilnot be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $11,800 2019 Collected the maturity value of the Stan-Mart note. Sold merchandise inventory to Appeal, Corp., receiving a 60-day, 6% note for $7,000. Ignore Cost of Goods Sold Appeal, Corp. dishonored its note at maturity: the business converted the Apr Jun. 23 Aug. 22 aturity value of the note to an account receivable. Loaned $17,000 cash to Crosby, Inc., receiving a 90-day, 16% note. Nov. 16 Dec. 5 Collected in full on account from Appeal, Corp 16 31 Accrued the interest on the Crosby, Inc. note. Record the required. (Round to the nearest dollar.) transactions in the journal of Sleepy Recliner Chairs. Explanations are notExplanation / Answer
Date Accounts title and explanation Debit Credit 2018 1-Jul Notes receivable 41000 sales revenue 41000 ( to record sale revenue) 31-Oct cash 24000 sales revenue 24000 ( To record cash sales 31-Dec Interest receivable (41000*8%*6/12) 1640 Interest revenue 1640 ( To record interest revenue accrued on note 31-Dec uncollectible accounts expenses 2000 Allowance for uncollectoble accounts 2000 ( To record uncollectible account expense 1-Apr Cash 43460 Notes receivable 41000 Interest receivable 1640 Interest revenue 820 ( To record the collection of notes receivable on maturity 23-Jun Notes receivable 7000 sales revenue 7000 ( to record the sales revenue 22-Aug Accounts receivable(7000+((7000*6*60/360) 7070 Notes receivable 7070 ( to record the sales revenue 16-Nov Notes receivable-16% 17000 cash 17000 ( To record the loaning cash) 5-Dec cash 7070 Accounts receivable 7070 ( To record the collection on account) 31-Dec Interest receivable (17000*16%*45/360) 340 interest Revenue 340 ( To accrual of interest revenue)
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