Question

Chapter 8 Hand-out Assignment Question 1 Revis Flooring has a December 31 year end and uses the perpetual inventory system. The following transactions occurred during 2021 and 2022: 2021 Aug 30 Sold goods with a cost of $ 8,250 to Jules Harrison for $ 14,500 on account, terms 2/15, n/30. Oct 1 Jules ran into some financial troubles and reached an agreement with Revis to convert the account receivable into a 90-day, 8% note receivable. Dec 18 Sold goods with a cost of $ 1,420 to Flore Hardy for $2,900 on account, terms 2/15, n/30. Dec 31 Prepared the adjusting entries to record accrued interest and an estimated allowance for doubtful accounts of $ 2,750. 2022 Jan 2 Collected the amount due from Flore. Instructions Prepare all required journal entries for the above transactions assuming Revis uses the allowance method and Allowance for Doubtful Accounts does not have an opening balance. Round all answers to the nearest whole dollar.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Aug 30	Accounts Receivable	$14,500
	Sales		$14,500
	(To record sale of goods)
Aug 30	Cost of Goods Sold	$8,250
	Merchandise Inventory		$8,250
Oct 1	Notes Receivable	$14,500
	Accounts Receivable		$14,500
Dec 18	Accounts Receivable	$2,900
	Sales		$2,900
	(To record sale of goods)
Dec 18	Cost of Goods Sold	$1,420
	Merchandise Inventory		$1,420
Dec 31	Allowance for Doubtful Accounts	$2,750
	Accounts Receivable		$2,750
Dec 31	Interest Receivable	$290		($14,500 x 8% x 3/12)
	Interest Revenue		$290
Jan 2	Cash	$2,842
	Sales Discount	$58		($2,900 x 2%)
	Accounts Receivable		$2,900