Required Information[The following information opplies to the questions displayed below.)On January 1, 2021, the general ledger of Big Blest Fireworks includes the following account balances:AccountsDebitCreditCashAccounts ReceivableAllowance for Lncollectible Accounts$ 23,30048, B00$ 4, 5e0InventoryLandAccounts PayableNotes Payable (6%, due in 3 years)37, e0072,10028,98037,eee63, 8ee39, 8eeCommon StockRetained EarningsTotals$172,408 $172,480The $37,000 beginning belance of inventory consists of 370 units, each costing $100. During January 2021, Big BlastFireworks had the following inventory transections:January 3 Purchase 1,68e units for S168, 800 on account ($105 cach).January 8 Purchase 1,78e units for $187, e00 on account ($118 cach).January 12 Purchase 1, see units for $287,890 on account ($115 cach).January 15 Return 135 of the units purchased on January 12 because of defects.January 19 Sell 5,200 units on account for $788,0ee. The cost of the units sold is deternined using a FIFO perpetualinventory systen.January 22 Receive $753, eee from custoners on accounts receivable.January 24 Pay $528, 0ee to inventory suppliers on accounts payable.January 27 rite off accounts receivable as uncollectible, $3,200.January 31 Pay cash for salaries during January, $121,808.The following information is available on Janusry 31, 2021.a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February foronly $100 each.b. The company estimates future uncollectible sccounts. The company determines $4,700 of accounts receivable onJanuary 31 ore psst due, and 35% of these accounts are estimated to be uncollectible. The remsining accountsreceivable on January 31 are not past due, and 5%% of these accounts are estimated to be uncollectible. (Hint: Use theJanuary 31 accounts receiveble bolance calculated in the general ledger.)Accrued interest expense on notes payable for January. Interest is expected to be paid esch December 31.d. Accrued income taxes ot the end of January are $13,000.equired:Record esch of the transoctions listed above, assuming a FIFO perpetual inventory system. (If no entry is required for aansaction/event, select "No Journal entry requtred" In the first account field.)Viewtraneaction lstJournal entry worksheet< 1 2 3 457810>Record the sale of 5,200 units inventory on account.Note: Enter debits before credits,DateGeneral JourmalDebitCreditJanuary 19co Record the cost of inventory sold.Note: Enter debits before credits.DateGeneral JournalDebitCreditJanuary 19Racord entryClear entryView general journal

Journal entry is a primary entry that records the financial transactions initially.

Credit Accounts Cash Accounts Receivable Allowance for uncollectible Accounts Inventory Land Accounts Payable Notes Payable (6x, due in 3 years) Debit $ 23, 100 40, 000 $ 4, s00 37,000 72,100 28,900 37,000 63,000 39,000 Comnon Stack Retained tarnings Totals $172,400 $172, 400

Credit Accounts Cash Accounts Receivable Allowance for uncollectible Accounts Inventory Land Accounts Payable Notes Payable (6x, due in 3 years) Debit $ 23, 100 40, 000 $ 4, s00 37,000 72,100 28,900 37,000 63,000 39,000 Comnon Stack Retained tarnings Totals $172,400 $172, 400

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 15P: Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed...

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Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts Receivable and the related Allowance for Doubtful Accounts were 1,200,000 and 60,000, respectively. An aging of accounts receivable indicated that 106,000 of the December 31, 2019, receivables may be uncollectible. The net realizable value of accounts receivable at December 31, 2019, was: a. 1,034,000 b. 1,094,000 c. 1,140,000 d. 1,154,000
Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?
Refer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed the following information relating to its receivables: The company has a recourse liability of 700 related to a note receivable sold to a bank. During 2019, credit sales (terms, n/EOM) totaled 2,200,000, and collections on accounts receivable (unassigned) amounted to 1,900,000. Uncollectible accounts totaling 18,000 from several customers were written off, and a 1,350 accounts receivable previously written off was collected. Additionally, the following transactions relating to Blackmons receivables occurred during the year: On December 31, 2019, an aging of the accounts receivable balance indicated the following: Required: 1. Prepare the journal entries to record the preceding receivable transactions during 2019 and the necessary adjusting entry on December 31, 2019. Assume a 360-day year for interest calculations and round calculations to the nearest dollar. 2. Prepare the receivables portion of Blackmons December 31, 2019, balance sheet. 3. Next Level Compute Blackmons accounts receivable turnover in days, assuming a 360-day business year. What is your evaluation of its collection policies? 4. If Blackmon uses IFRS, what might be the heading of the section for the receivables reported in Requirement 2?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
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