Homework Answers
1. In the books of Betty DeRose Inc. :
| Date | Account Titles | Debit | Credit |
| 2004 | $ | $ | |
| Jan 4 | Accounts Receivable | 6,500 | |
| Sales | 6,500 | ||
| Mar 19 | Cash | 4,000 | |
| Accounts Receivable | 4,000 | ||
| Sep 27 | Allowance for Doubtful Accounts | 2,500 | |
| Accounts Receivable | 2,500 | ||
| Dec 31 | Bad Debt Expense | 2,460 | |
| Allowance for Doubtful Accounts | 2,460 | ||
| 2005 | |||
| Mar 8 | Accounts Receivable | 2,500 | |
| Allowance for Doubtful Accounts | 2,500 | ||
| Mar 8 | Cash | 2,500 | |
| Accounts Receivable | 2,500 |
2.
| Transaction/ Event | Effect on Net Income | Effect on Net Realizable Value | Effect on Statement of Cash Flows |
| Jan 4, 2004 | + 6,500 | +6,500 | 0 |
| Mar 19, 2004 | 0 | (4,000) | +4,000 |
| Sep 27, 2004 | (2,500) | (2,500) | 0 |
| Dec 31, 2004 | (2,460) | (2,460) | 0 |
| Mar 8, 2005 | 2,500 | 0 | 2,500 |
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