Question

Schneider Company has a May 31 fiscal year end and adjusts Accounts Annually. Selected transactions in the year include the Following:

P8.9A (LO 1, 3) AP Schneider Company has a May 31 fiscal year end and adjusts accounts annually. Selected transactions in the year included the following: Jan. 2 Sold $24,000 of merchandise to Sapounas Company, terms n/30. The cost of the goods sold was $14,400. Schneider uses the perpetual inventory system. Feb. 1 Accepted a $24,000, five-month, 5% promissory note from Sapounas Company for the balance due. (See January 2 transaction.) Interest is payable at maturity. 15 Sold $15,000 of merchandise costing $9,000 to Garrison Company and accepted Garrison's three-month, 5% note in payment. Interest is payable at maturity. Mar. 15 Sold $12,000 of merchandise to Hoffman Co., terms n/30. The cost of the merchandise sold was $7,200. April 15 Collected the amount owing from Hoffman Co. in full. May Collected the Garrison note in full. (See February 15 transaction.) 15 31 Accrued interest at year end. July 1 Sapounas Company dishonoured its note of February 1. The company is bankrupt and there is no hope of future settlement. 13 Sold $6,000 merchandise costing $3,600 to Weber Enterprises and accepted Weber's $6,000, three-month, 7% note for the amount due, with interest payable at maturity. Oct. 13 The Weber Enterprises note was dishonoured. (See July 13 transaction.) It is expected that Weber will eventually pay the amount owed. Instructions Record the above transactions. (Round calculations to the nearest dollar.)

Answer 1

Jan 2.

Sapaunos Company debit 24000

To sales 24000

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Feb 1

Bills Receivable (Promissory note) debit 24000

To Sapaunos Company 24000

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Feb 15

Garrison Company 15000

To sales 15000

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Bills receivable 15000

to garrison 15000

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Interest accrued 750/12*3=187.50

to interest @ 5% =187.50

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Hoffman ac debit 12000

to sales 12000

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bank debit 12000

To Hoffman 12000

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Bank debit 15000

to Bills receivable 15000

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sapounas 24000

to bills receivable 24000

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weber 6000

to sales 6000

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Bills receivable 6000

to weber 6000

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weber 6000

to bills receivable 6000

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interest accrued 105

to interest 105

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