Need Help on Accounting Chapter 9 Test

Name: _______________________________________

Please show all calculations!!!

PROBLEM #1 – 25 points

At the beginning of the year, Sonoran Park Equipment's accounts receivable balance was $105,000 and the allowance for doubtful accounts had a $1,950 credit. Sonoran's sales in the current year were $787,500, 80% of which were on credit. Collections on account during the year were $502,000. Additionally, Sonoran wrote off $3,000 of uncollectible accounts during the year. It is estimated that 6% of the year end accounts receivable are expected to be uncollectible.

Using the allowance for bad debts based on accounts receivable aging method, determine the journal entry for the estimate of bad debts. What is Sonoran's net realizable value of accounts at the end of the year?

A. Journal Entry

Show work here:

B. Net Realizable Value

PROBLEM #2 – 10 points

Good Day Service Center received a 120 day, 6% note for $50,000, dated April 12, 20XX from a customer on account. Determine the (a) due date of the note, (b) the maturity value of the note, and (c) the journal entry to record the receipt of the payment of the note at maturity. Use a 360 day year.

a)

b)

c)

PROBLEM #3 – 5 points

What is the difference between an account receivable and a note receivable?