Question

RE8.11 (LO 2,4) During its first year of operations, Fertig Company had credit sales of $3,000,000, of which S400,000 remained uncollected at year-end. The credit manager estimates that $18,000 of these receivables will become uncollectible. zero in Allowance for Doubtful Accounts.) b. Prepare the current assets section of the balance sheet for Fertig Company, assuming that in addi- tion to the receivables it has cash of $90,000, merchandise inventory of $180,000, and supplies of $13,000 iu c. Calculate the accounts receivable turnover and average collection period. Assume that average net accounts receivable were $300,000. Explain what these measures tell us. BE8.12 (LO4) The financial statements of Minnesota Mining and Manufacturing Company (3M) report net sales of $20.0 billion. Accounts receivable (net) are $2.7 billion at the beginning of the year and $2.8 billion at the end of the year. Compute 3M's accounts receivable turnover. Compute 3M's av erage collection period for accounts receivable in days. $28,000, terms n March 1, Lincoln sold merchandise on account to Amelia Company for lin returns merchandise with a sales price of $1,000 1/10, net 45 On March 6 A mel Exercises E8.1 (LO 1) On January 6, Jacob Co. sells merchandise on account to Harley Inc. for $9,200, terms 1/10. n/30. On January 16, Harley pays the amount d 21 Instructions Prepare the entries on Jacob Co.'s books to record the sale and related collection. (Omit cost of goods sold entries.) E8.2 (LO 1) Presented below are selected transactions of Molina Company. Molina sells in large quan- tities to other companies and also sells its product in a small retail outlet. March 1 Sold merchandise on account to Dodson Company for $5,000, terms 2/10, n/30. 3 Dodson Company returned merchandise worth $500 to Molina. 9 Molina collected the amount due from Dodson Company from the March I sale. 15 Molina sold merchandise for $400 in its retail outlet. The customer used his Molina credit card. Molina added 1.5% monthly interest to the customer's credit card balance. 31 Instructions Prepare journal entries for the transactions above. (Ignore cost of goods sold entries and explanations.) E8.3 (LO 1) Presented below are two independent situations.

Answer 1

Dear student, we cannot able to post solution more than one question as per our policy.

Part A

Event	General Journal	Debit	Credit
	Bad debt expense	18,000
	Allowance for Doubtful Accounts		18,000
	(To record bad debts expense.)
Allowance of doubtful account After Adjustment			$        18,000
Less: Allowance of doubtful account before Adjustment			$                  0
Adjustment for Bad debts expense			$        18,000

Part B

Ferting Company
Balance Sheet
As of Dec 31, First Year
Assets
Current Assets
Cash		$        90,000
Account Receivable	$        400,000
Allowance for Doubtful Accounts (less)	$           18,000
Account Receivable, net of allowance		$     382,000
Merchandise Inventory		$     180,000
Supplies		$        13,000
Total Current Assets		$     665,000

Part C

Credit Sales	$     3,000,000
Divided by: Net Account Receivable	$        300,000
Account Receivable turnover	10.00	Times
Number of Years in a day	365
Divided by: Account Receivable turnover	10
Average Collection period	36.50	Days
Account Receivable turnover	10.00	Times
It means company sales to its customer 10 times of account receivable Balance.
Average Collection period	36.50	Days
It means company can collect cash from its customer within 36.50 days