Question

Cash Accounts receivable Use the T-accounts to record the following transactions for LAX, LLC.: 99,508 169,010 1. LAX sold goods to Onalaska, Inc. for $55,000, on account, 1/10, net/30. 2. LAX sold goods to La Crescent, LLC for $76,000, on account, 2/15, net 30. 3. LAX collected half of the amount due from Onalaska, Inc. 10 days after the purchase date and the rest 30 days after the purchase date. 99,508 169,010 4. La Crescent, LLC returned half the goods bought and negotiated an allowance of 10% on the rest. Revenue Allowance for UA 268,518 250 $ (250) 5. La Cresent, LLC paid the remaining invoice amount 14 days after the purchase date. $ 6. LAX estimated that 3.5% of the outstanding 268,518 Sales discounts receivables will be uncollectable. Record bad debt Bad debt expense expense. 7. LAX wrote off a $950 receivable for Star, Co. 8. Later, Star, Co. paid $800 toward the original $950 invoice. Sales returns & allowances Total debits & credits 268,268 268,268 You're in balance! 9. Calculate the interest revenue for 2021 on the following notes: Term (months) Date Principal Interest revenue Rate % 5.05% 2021/2/28 650,000 2020/9/30 5.25% $ 2,500,000 4.95% 2021/10/1 1,850,500

Answer 1

Cash Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
	Balance b/d	$99,508			Balance c/f	$1,88,549
3	Accounts Receivable	$54,725
5	Accounts Receivable	$33,516
8	Bad Debt (Recovered)	$800
		$1,88,549				$1,88,549
Accounts Receivable Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
	Balance b/d	$1,69,010		3	Sales Discounts	$275	=(55000/2)*1%
1	Revenue	$55,000		3	Cash	$54,725	=((55000/2)-275)+(55000/2)
2	Revenue	$76,000		4	Sales Return and allowances	$41,800	=38000+3800
9	Interest Revenue	$1,53,017		5	Sales Discounts	$684	=(76000/2)*90%*2%
				5	Cash	$33,516	=(76000/2)*90%-684
				6	Bad Debt Expense	$5,915	=169010*3.5%
				7	Bad Debt Expense	$950
					Balance c/f	$3,15,161
		$4,53,027				$4,53,027
Revenue Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
	Balance c/f	$5,52,535			Balance b/d	$2,68,518
				1	Accounts Receivable	$55,000
				2	Accounts Receivable	$76,000
				9	Accounts Receivable (Interest Revenue)	$1,53,017
		$5,52,535				$5,52,535
Allowance for UA Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
	Balance b/d	$250			Balance	$250
					Balance c/f	$0
		$250				$250
Bad Debt Expense Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
6	Accounts Receivable	$5,915		8	Cash	$800
7	Accounts Receivable	$950			Balance c/f	$6,065
		$6,865				$6,865
Sales Discounts Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
3	Accounts Receivable	$275			Balance c/f	$959
5	Accounts Receivable	$684
		$959				$959
Sales Return and Allowances Account
No.	Particulars	Debit ($)		No.	Particulars	Credit ($)
4	Accounts Receivable	$38,000			Balance c/f	$41,800	=76000/2
4	Accounts Receivable	$3,800					=(76000/2)*10%
		$41,800				$41,800
		Total Debits & Credits
		$5,52,535		$5,52,535

Calculation of Interest Revenue
Date	Principal	Rate%	Term (Months)	Interest Revenue
2021/2/28	$6,50,000	5.05%	6	$16,413
2020/9/30	$25,00,000	5.25%	9	$98,438
2021/10/1	$18,50,500	4.95%	5	$38,167
				$1,53,017