Acc 557 ex 8-3 elburn, ex 8-5 crawford, ex 8-14 lashkova, pr8-7a

Exercise 8-3

The ledger of Elburn Company at the end of the current year shows Accounts Receivable $110,000, Sales Revenue $840,000, and Sales Returns and Allowances $28,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(a)  If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that T. Thum’s $1,400 balance is uncollectible.

(b)  If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.

(c)  If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.

Exercise 8-5

At December 31, 2013, Crawford Company had a balance of $15,000 in Allowance for Doubtful Accounts. During 2014, Crawford wrote off accounts totaling $14,100. One of those accounts ($1,800) was later collected. At December 31, 2014, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $19,000.

Prepare journal entries to record the 2014 transactions of Crawford Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 8-14

Lashkova Company had accounts receivable of $100,000 on January 1, 2014. The only transactions that affected accounts receivable during 2014 were net credit sales of $1,000,000, cash collections of $920,000, and accounts written off of $30,000.

(a) Compute the ending balance of accounts receivable.

(b) Compute the accounts receivable turnover ratio for 2014. (Round answer to 2 decimal places, e.g. 2.50.)

(c) Compute the average collection period in days. (Round answer to 1 decimal place, e.g. 25.5.)

Problem 8-7A

On January 1, 2014, Derek Company had Accounts Receivable $139,000, Notes Receivable $30,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Kaye Noonan Company.  It is a 4-month, 12% note dated December 31, 2013. Derek Company prepares financial statements annually. During the year, the following selected transactions occurred.

Jan. 5     Sold $24,000 of merchandise to Zwingle Company, terms n/15.

      20     Accepted Zwingle Company’s $24,000, 3-month, 9% note for balance due.

Feb. 18   Sold $8,000 of merchandise to Gerard Company and accepted Gerard’s $8,000, 6-month, 8% note for the amount due.

Apr. 20  Collected Zwingle Company note in full.

        30   Received payment in full from Kaye Noonan Company on the amount due.

May 25   Accepted Isabella Inc.’s $4,000, 3-month, 7% note in settlement of a past-due balance on account.

Aug. 18   Received payment in full from Gerard Company on note due.

         25  The Isabella Inc.’s note was dishonored. Isabella Inc.’s is not bankrupt; future payment is anticipated.

Sept. 1    Sold $12,000 of merchandise to Fernando Company and accepted a $12,000, 6-month, 10% note for the amount due.

Journalize the transactions. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered.  Do not indent manually. Round answers to the nearest whole dollar, e.g. 5,275.)