Question

Accounts Receivable, Notes Receivable Beginning Balance in Accounts Receivable: $15,000 Beginning Balance in Allowance for Uncollectible Accounts is a debit of $120 You will need to prepare a t-account for accounts receivable and allowance for uncollectible (doubtful) accounts. Use a 360-day year to calculate interest. 1. Adjust the allowance for uncollectible accounts assuming that 10% of the balance accounts receivable will be written off in the coming year. 2. Derrick sends a note via carrier pigeon stating he will not be able to pay off his account. Write off the $270 account using the allowance method. 3. Archie audits Meredith's accounting records for $2,000. % is paid in cash and the remainder put on account. 4. Torres calls and requests an extension on her accounts receivable. Her $5,000 account is transferred to a notes receivable with terms of 10% and 90 days. 5. Cristina dishonors her note receivable of $3,000. Terms were 60 days and 5% interest. Charge back to accounts receivable. 6. Alex brings $900 in cash by the office to pay his bill. 7. Derrick sends a check for $50. 8. Meredith pays $500 of the $1,000 she owes and the remaining $500 is put on a 30 day 15% note. 9. Adjustment: Recognize 30 days of the note in #4 and 15 days of the note in #8. 10. Cristina pays her account in full 11. The bank sends a note stating Alex's cash was counterfeit. Put back on his account. 12. Meredith dishonors her note. Write off the account. 13. Write off Alex's account. 14. Based on the ending balance of accounts receivable, assume that 5% will be written off in the coming year and update the allowance account to reflect this amount.

i need help with questions 6-14

Answer 1

Note: All of the Entries are Subject to the numbers represented in the questions ,Also note that Allowance account is not touched till the written off or reversing of written off ,that is moving the account receivable from notes to cash or accounts will not effect the Allowance to Uncollectable Account.

Allowance of Uncollectable accounts
		120
		1,500	1
2	270
		50	7
12	500
13	900
		441.5	14
	Total	441.5
Account Recievable
	15,000
		270	2
3	1000
		5000	4
5	3000
		900	6
		1000	8
		3000	10
11	900
12	500	500	12
		900	13
	Total	8,830

	Journal entry
		Dr	Cr
1	Bad Debt Expense	1500
	Allowance for uncollectable		1500
2	Account Receivable		270
	Allowance for Uncollectable	270
3	Account Receivable	1000
	Archies Audit Adjustment		1000
4	Notes Receivable	5000
	Accounts receivable		5000
5	Notes Receivables		3000
	Accounts Receivables	3000
6	Cash	900
	Accounts Receivables		900
7	Cash	50
	Allowance for uncollectable		50
8	Cash	500
	Notes Receivable	500
	Accounts receivable		1000
9	interest Earned		44.80
	Interest Receivables	44.80
Please Refer Below the Table for the Calculations for 9
10	Cash	3000
	Accounts receivables		3000
11	Cash		900
	Accounts receivables	900
12	Notes receivables		500
	Allowance for uncollectable	500
13	Accounts receivables		900
	Allowance for uncollectable	900
14	Bad Debt Expense		441.5
	Allowance for uncollectable	441.5

6) Alex brings in cash to office to pay his bills

7) Derrick Send check for $50

So we should revers the written off for $50

8) She pays Half that is 500 in cash and for 500 on Notes receivables at 30 days 15%

9)

Interest Earned is calculated for 9 as follows

Recognizing 30 days of note in #4

5000*0.10*30/360=41.67

Recognizing 15 days of note in #8

500*0.15*15/360=3.13

Total = 41.67+3.13 =44.80

10)Cash received

11) Alex cash Was counterfeit and we should put back 900 on his accounts

12) written off 500

13) written off 900

14)

Based on the Account receivables of 8,780 of which 5% would be updated to the allowance for uncollectable account to written off in the future

8830*0.05

=441.5

This will be expense with bad dept and added to allowance for uncollectable account