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Exam 9: Receivables

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Question 81

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Journalize the following transactions using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

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Question 82

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Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a customer on account. (Assume a 360-day year when calculating interest.)

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Question 83

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The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

When an account receivable that has been written off is subsequently collected, the account receivable is said to be reinstated.

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Financial Statement data for the years ended December 31 for Parker Corporation is as follows: 2012 2011 Net Sales $2,595,600 $2,409,500 Accounts Receivable Beginning of the year $ 390,000 $400,000 End of the year 434,000 390,000 a) Determine the accounts receivable turnover for 2012 and 2011. b) Determine the number of days' sales in receivables for 2012 and 2011. c) Does the change in accounts receivable turnover and number of days' sales in receivables from 2011 to 2012 indicate a favorable or unfavorable trend.?

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000. Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

When referring to a note receivable or promissory note

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a