Acct questions 9

chapter_9_questions.docx

Home >Business & Finance homework help >Accounting homework help >Acct questions 9

Feb.	3.	Sold merchandise on account to Dr. Jill Hall, $18,040. The cost of the merchandise sold was $9,550.
Sept.	10.	Received $5,010 from Dr. Jill Hall and wrote off the remainder owed on the sale of February 3 as uncollectible.
Dec.	21.	Reinstated the account of Dr. Jill Hall that had been written off on September 10 and received $13,030 cash in full payment.

Journalize the above transactions in the accounts of Midwest Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables . Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Midwest Medical Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Dr. Jill Hall
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the transactions in the accounts of Midwest Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables . Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11

Apr.	2.	Sold merchandise on account to Peking Palace Co., $37,940. The cost of the merchandise sold was $25,700.
June	9.	Received $9,050 from Peking Palace Co. and wrote off the remainder owed on the sale of April 2 as uncollectible.
Oct.	31.	Reinstated the account of Peking Palace Co. that had been written off on June 9 and received $28,890 cash in full payment.

Journalize the above transactions in the accounts of Dining Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Dining Interiors Company

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Peking Palace Co.
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the transactions in the accounts of Dining Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11

Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8.

Waddell Industries

Estimate the allowance for doubtful accounts


1				Days Past Due	Days Past Due	Days Past Due	Days Past Due
2		Balance	Not Past Due	1-30	31-60	61-90	Over 90
3	Total receivables	1,150,100.00	618,800.00	233,100.00	118,000.00	105,800.00	74,400.00
4	Percentage uncollectible		3.0%	4.0%	15.0%	33.0%	86.0%
5	Allowance for doubtful accounts

Waddell Industries has computed that the proper balance for the Allowance for Doubtful Accounts at August 31 is $140,434. Assume that the allowance for doubtful accounts for Waddell Industries has a credit balance of $6,971 before adjustment on August 31.

Journalize the adjusting entry for uncollectible accounts as of August 31. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Waddell Industries

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the adjusting entry for uncollectible accounts as of August 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Selby’s Bike Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2016, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

Age Interval	Balance	Percent Uncollectible
Not past due	$1,300,000	0.65%
1 - 30 days past due	482,900	4
31 - 60 days past due	178,500	8
61 - 90 days past due	56,900	13
91 - 180 days past due	36,200	37
Over 180 days past due	23,700	83
	$2,078,200

Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2016.

	Estimated Uncollectible Accounts
Age Interval	Balance	Percent	Amount
Not past due	$1,300,000	0.65%
1 - 30 days past due	482,900	4%
31 - 60 days past due	178,500	8%
61 - 90 days past due	56,900	13%
91 - 180 days past due	36,200	37%
Over 180 days past due	23,700	83%
Total	$2,078,200

Selby’s Bike Co. has determined that the proper balance for the Allowance for Doubtful Accounts at December 31 is $80,574. Assume that the allowance for doubtful accounts for Selby’s Bike Co. had a debit balance of $7,880 as of December 31, 2016.

Journalize the adjusting entry for uncollectible accounts as of December 31, 2016. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Selby’s Bike Co.General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary
	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the adjusting entry for uncollectible accounts as of December 31, 2016. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Master Designs Decorators issued a 180-day, 7% note for $65,400, dated May 14, 2016, to Morgan Furniture Company on account.

Required:

Determine the due date of the note.

Determine the maturity value of the note.

Journalize the entries to record the following: (1) receipt of the note by Morgan Furniture and (2) receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Morgan Furniture Company

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Master Designs Decorators
129	Allowance for Doubtful Accounts
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

C. (1) Journalize the entry to record the receipt of the note by Morgan Furniture. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

C. (2) Journalize the entry to record the receipt of payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3

Apr.	18.	Received a $51,600, 30-day, 6% note dated April 18 from Glenn Cross on account.
	30.	Received a $36,000, 60-day, 8% note dated April 30 from Rhoni Melville on account.
May	18.	The note dated April 18 from Glenn Cross is dishonored, and the customer’s account is charged for the note, including interest.
June	29.	The note dated April 30 from Rhoni Melville is dishonored, and the customer’s account is charged for the note, including interest.
Aug.	16.	Cash is received for the amount due on the dishonored note dated April 18 plus interest for 90 days at 8% on the total amount debited to Glenn Cross on May 18.
Oct.	22.	Wrote off against the allowance account the amount charged to Rhoni Melville on June 29 for the dishonored note dated April 30.

Journalize the above transactions in the accounts of Safari Games Co., which operates a riverboat casino. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Safari Games Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Glenn Cross
122	Accounts Receivable-Rhoni Melville
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the transactions in the accounts of Safari Games Co., which operates a riverboat casino. Refer to the Chart of Accounts for exact wording of account titles. Round all computations to the whole dollar.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

June	2.	Received $1,110 from Melissa Crone and wrote off the remainder owed of $4,260 as uncollectible.
Oct.	9.	Reinstated the account of Melissa Crone and received $4,260 cash in full payment.

Journalize the above transactions, using the direct write-off method of accounting for uncollectible receivables . Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSGeneral Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Melissa Crone
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary
	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the transactions, using the direct write-off method of accounting for uncollectible receivables . Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7

Guzman Company received a 60-day, 6% note for $28,000 dated July 12 from a customer on account.

	Required:
	a. Determine the due date of the note.
	b. Determine the maturity value of the note.
	c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSGuzman CompanyGeneral Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
129	Allowance for Doubtful Accounts
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment
	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary
	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3