Homework Answers
| 6) | In the case of gross method both sales and Accounts receivable are entered at gross amount at the time of sales & when payment received from customers within the discount period the following entry is recorded . | ||
| Cash | |||
| Sales Discount | |||
| To Accounts Receivable | |||
| Ans a) | |||
| Cash | $ 14,700.00 | ||
| To Sales Discount($15000*2%) | $ 300.00 | ||
| To Accounts Receivable | $ 15,000.00 | ||
| 7) | Outstanding Accounts receivable | $ 65,00,000.00 | |
| Uncollectible accounts receivable=($6500000*6%) | $ 3,90,000.00 | ||
| Less: Credit balance for accounts for doubtful accounts | $ -12,000.00 | ||
| Ans (d) | Bad debts expense | $ 3,78,000.00 | |
| 8) | Journal Entry recorded at the time of Factor transfer | ||
| Cash=($6000000*85%) | $ 51,00,000.00 | ||
| Due from Factor(Amount retained for adjustments)=($6000000*10%) | $ 6,00,000.00 | ||
| Loss on sale of receivable(Finance charge)=($6000000*5%) | $ 3,00,000.00 | ||
| To Accounts Receivable | $ 60,00,000.00 | ||
| Ans (a) | Loss $300000 |
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On July 22, Peter sold $23,500 of inventory items on credit with the terms 2/15, net 30. Payment on $15,000 sales was r...
Please help with problems 6, 7 , and 8 6. On July 22, Peter sold $23,500...
Please help with problems 6, 7 , and 8
6. On July 22, Peter sold $23,500 of inventory items on credit with the terms 2/15, net 30. Payment on $15,000 sales was received on August 1 and the remaining payment was received on August 12. Assuming Peter uses the gross method of accounting for sales discounts, which one of the following entries was made on August 1 to record the cash received? a. Cash.................... 14,700 Sales Discount.................. 300 Accounts Receivable...
5. AG Inc. made a $25,000 sale on account with the following terms: 2/10, n/30. If...
5. AG Inc. made a $25,000 sale on account with the following terms: 2/10, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale? a. Debit Accounts Receivable for $24,500. b. Debit Accounts Receivable for $24,500 and Sales Discounts for $500. C. Debit Accounts Receivable for $25,000. d. Debit Accounts Receivable for $25,000 and Sales Discounts for $500. 6. On July 22, Peter sold...
Presented below is information related to Riverbed Corp., which sells merchandise with terms 2/10, net 60....
Presented below is information related to Riverbed Corp., which sells merchandise with terms 2/10, net 60. Riverbed Corp. records its sales and receivables net July 1 Riverbed Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000. 5 Accounts receivable of $12,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 8%. Cash is received for the proceeds: collections are handled by the finance company. (These accounts were all past the...
Brief Exercise 7-2 Cullumber Co. uses the gross method to record sales made on credit. On...
Brief Exercise 7-2
Cullumber Co. uses the gross method to record sales made on
credit. On June 1, 2017, it made sales of $67,400 with terms 3/15,
n/45. On June 12, 2017, Cullumber received full payment for the
June 1 sale.
Prepare the required journal entries for Cullumber Co.
(If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts. Credit account titles
are automatically indented when the amount is entered. Do not...
Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are...
Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of 2012, accounts receivable were presented in the company's statement of financial position as follows: Accounts receivable from clients Less: Allowance for Impairment $ 3,100,000 80,000 During 2013, $165,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $15,000 were subsequently collected. At the end of 2013, an aging of accounts...
Exercise 7-21 Presented below is information for Metlock Company. 1. Beginning-of-the-year Accounts Rece...
Exercise 7-21
Presented below is information for Metlock Company.
1.
Beginning-of-the-year Accounts Receivable balance was
$23,200.
2.
Net sales (all on account) for the year were $106,000. Metlock
does not offer cash discounts.
3.
Collections on accounts receivable during the year were
$82,500.
Metlock is planning to factor some accounts receivable at the end
of the year. Accounts totaling $12,400 will be transferred to
Credit Factors, Inc. with recourse. Credit Factors will retain 7%
of the balances for probable adjustments...
Presented below is information related to Skyseng Corp, which sels merchandise with term 2/10, net 60 Skysong Corp....
Presented below is information related to Skyseng Corp, which sels merchandise with term 2/10, net 60 Skysong Corp.records its sales and receivables et July 1 Skysong Corp. sold to Warren Harding Ca merchandise having a sales price of $18.000 5 Accounts receivable of $12,300 Igross) are factored with Andrew Jackson Credit Corp, without recourse ata financing charge of 8x Cash is received for the proceeds, collections are handled by the finance company. These accounts were all past the discount period)...
Maddox Resources has credit sales of $197,000 yearly with credit terms of net 30 days, which...
Maddox Resources has credit sales of $197,000 yearly with credit terms of net 30 days, which is also the average collection period. Maddox does not offer a discount for early payment, so its customers take the full 30 days to pay. (Use 365 days in a year.) a-1. What is the average receivables balance? (Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Accounts receivable balance $ a-2. What is the receivables turnover? (Round the...
Brief Exercise 7-10 Sheridan Incorporated factored $163,900 of accounts receivable with Skysong Factors Inc. on a...
Brief Exercise 7-10
Sheridan Incorporated factored $163,900 of accounts receivable
with Skysong Factors Inc. on a without-recourse basis. Skysong
assesses a 2% finance charge of the amount of accounts receivable
and retains an amount equal to 6% of accounts receivable for
possible adjustments.
Prepare the journal entry for Sheridan Incorporated and Skysong
Factors to record the factoring of the accounts receivable to
Skysong. (If no entry is required, select "No Entry"
for the account titles and enter 0 for the...
Exercise 7-16 The trial balance before adjustment for Teal Company shows the following balances. Dr. Cr....
Exercise 7-16
The trial balance before adjustment for Teal Company shows the
following balances.
Dr.
Cr.
Accounts Receivable
$84,800
Allowance for Doubtful Accounts
2,420
Sales Revenue
$434,200
Using the data above, give the journal entries required to record
each of the following cases. (Each situation is independent.)
1.
To obtain additional cash, Teal factors without recourse
$29,700 of accounts receivable with Stills Finance. The finance
charge is 11% of the amount factored.
2.
To obtain a 1-year loan of $57,600,...
Please help with problems 6, 7 , and 8
6. On July 22, Peter sold $23,500 of inventory items on credit with the terms 2/15, net 30. Payment on $15,000 sales was received on August 1 and the remaining payment was received on August 12. Assuming Peter uses the gross method of accounting for sales discounts, which one of the following entries was made on August 1 to record the cash received? a. Cash.................... 14,700 Sales Discount.................. 300 Accounts Receivable...
5. AG Inc. made a $25,000 sale on account with the following terms: 2/10, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale? a. Debit Accounts Receivable for $24,500. b. Debit Accounts Receivable for $24,500 and Sales Discounts for $500. C. Debit Accounts Receivable for $25,000. d. Debit Accounts Receivable for $25,000 and Sales Discounts for $500. 6. On July 22, Peter sold...
Presented below is information related to Riverbed Corp., which sells merchandise with terms 2/10, net 60. Riverbed Corp. records its sales and receivables net July 1 Riverbed Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000. 5 Accounts receivable of $12,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 8%. Cash is received for the proceeds: collections are handled by the finance company. (These accounts were all past the...
Brief Exercise 7-2
Cullumber Co. uses the gross method to record sales made on
credit. On June 1, 2017, it made sales of $67,400 with terms 3/15,
n/45. On June 12, 2017, Cullumber received full payment for the
June 1 sale.
Prepare the required journal entries for Cullumber Co.
(If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts. Credit account titles
are automatically indented when the amount is entered. Do not...
Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of 2012, accounts receivable were presented in the company's statement of financial position as follows: Accounts receivable from clients Less: Allowance for Impairment $ 3,100,000 80,000 During 2013, $165,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $15,000 were subsequently collected. At the end of 2013, an aging of accounts...
Exercise 7-21
Presented below is information for Metlock Company.
1.
Beginning-of-the-year Accounts Receivable balance was
$23,200.
2.
Net sales (all on account) for the year were $106,000. Metlock
does not offer cash discounts.
3.
Collections on accounts receivable during the year were
$82,500.
Metlock is planning to factor some accounts receivable at the end
of the year. Accounts totaling $12,400 will be transferred to
Credit Factors, Inc. with recourse. Credit Factors will retain 7%
of the balances for probable adjustments...
Presented below is information related to Skyseng Corp, which sels merchandise with term 2/10, net 60 Skysong Corp.records its sales and receivables et July 1 Skysong Corp. sold to Warren Harding Ca merchandise having a sales price of $18.000 5 Accounts receivable of $12,300 Igross) are factored with Andrew Jackson Credit Corp, without recourse ata financing charge of 8x Cash is received for the proceeds, collections are handled by the finance company. These accounts were all past the discount period)...
Brief Exercise 7-10
Sheridan Incorporated factored $163,900 of accounts receivable
with Skysong Factors Inc. on a without-recourse basis. Skysong
assesses a 2% finance charge of the amount of accounts receivable
and retains an amount equal to 6% of accounts receivable for
possible adjustments.
Prepare the journal entry for Sheridan Incorporated and Skysong
Factors to record the factoring of the accounts receivable to
Skysong. (If no entry is required, select "No Entry"
for the account titles and enter 0 for the...
Exercise 7-16
The trial balance before adjustment for Teal Company shows the
following balances.
Dr.
Cr.
Accounts Receivable
$84,800
Allowance for Doubtful Accounts
2,420
Sales Revenue
$434,200
Using the data above, give the journal entries required to record
each of the following cases. (Each situation is independent.)
1.
To obtain additional cash, Teal factors without recourse
$29,700 of accounts receivable with Stills Finance. The finance
charge is 11% of the amount factored.
2.
To obtain a 1-year loan of $57,600,...
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