Prepare the journal entry under the direct write-off method that ABC company would record when it determines that $500 cannot be collected from its customer DEF from a previous sale on account:
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12) Prepare the
DR: BDE $500
CR: AR $500
13) After being written off inn question 12, DEF company winds up partially paying ABC $250 that it previously owed, before officially going out of business. Please prepare the necessary journal entries to reverse the write off for the appropriate amount, and to record the receipt of cash:
DR:
CR:
DR:
CR:
Hi student
Since there are multiple questions, we will answer only first question.
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Solved in 2 steps
- Laminate Express extended credit to customer Amal Sunderland in the amount of $244,650 for his January 4 purchase of flooring. Terms of the sale are 2/30, n/120. The cost of the purchase to Laminate Express is $88,440. On April 5, Laminate Express determined that Amal Sunderlands account was uncollectible and wrote off the debt. On June 22, Amal Sunderland unexpectedly paid 30% of the total amount due in cash on his account. Record each Laminate Express transaction with Amal Sunderland. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Laminate Express rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, though, that in most cases the direct write-off method is not allowed.Window World extended credit to customer Nile Jenkins in the amount of $130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is $56,200. On September 4, Window World determined that Nile Jenkinss account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.
- Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.On November 1, 2019, Gerakos Corporation sold software and a six-month technical support contract to a customer for $80,000. Gerakos sells the same software without technical support for $60,000. It does not sell technical support separately. Gerakos uses the residual method to allocate the transaction price. What amount of revenue does Gerakos recognize in 2019 and in 2020?Sarasota Inc. factors receivables with a carrying amount of $225,400 to Joffrey Company for $173,400 on a with recourse basis.The recourse provision has a fair value of $3,330. This transaction should be recorded as a sale.Prepare the appropriate journal entry to record this transaction on the books of Sarasota Inc. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
- Managers from Cloud Ltd. have received the information that it is likely that one of its customers which represent 25%25% of trade receivables will not pay. The balance of trade receivables equals £135,200135,200. In addition, the current balance of insurance expense includes an amount of £4,2504,250 that corresponds to the next accounting period. After considering the two journal entries related to the two economic transactions, which of the following statements is true? a. Cloud Ltd. decreases assets by £29,55029,550 and increases expenses in the same quantity. b. Cloud Ltd. decreases assets by £33,80033,800, decreases expenses by £4,2504,250 and increases liabilities by £33,80033,800. c. Cloud Ltd. increases assets by £29,55029,550 and increases liabilities in £4,2504,250. d. None of the answers is true.Can you explain how properly complete this problem, I keep gtting it incorrect. At the end of 2021, Nash's Trading Post, LLC has accounts receivable of $635,600 and an allowance for doubtful accounts of $23,140. 1. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,210. 2. On March 4, 2022, Nash's Trading Post, LLC receives payment of $4,210 in full from Madonna Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount Enter a credit amount 2. Enter an account title to record recovery of accounts receivable Enter a debit amount…On December 31, 2018, Sunland Company is in financial difficulty and cannot pay a note due that day. It is a $3100000 note with $310000 accrued interest payable to Wildhorse, Inc. Wildhorse agrees to accept from Sunland equipment that has a fair value of $1460000, an original cost of $2400000, and accumulated depreciation of $1140000. Wildhorse also forgives the accrued interest, extends the maturity date to December 31, 2021, reduces the face amount of the note to $1260000, and reduces the interest rate to 6%, with interest payable at the end of each year.Sunland should recognize a gain on the partial settlement and restructure of the debt of $0. $363200. $463200. $75600.
- Prudential Company sold 30 air conditioning units, on January 15, 2020; sale price for each unit is P40,000.All of the sales are subject to terms 2/10, n30; the entity used the net method of accounting for accounts receivable.Required;1. prepare journal entry to record the sale.2. prepare the journal entry to record receipt of the payment assuming the correct amount was received on January 25, 2020.3. prepare the journal entry to record receipt of the payment, assuming the correct amount was received on February 10, 2020.At 30 June 20X6 a business had a provision for doubtful debts of £37600. At 30 June 20X7 it was decided to write-off £21900 as bad debts and that a specific provision for doubtful debts of £45300 was required. What is the total expense for bad and doubtful debts which will appear in the business's income statement for the year ended 30 June 20X7?The following transactions were entered into by Keppel Corp. for the current year: Sold goods to Shang Co. amounting to P 200,000. In the sales contract, there is a clause that the seller has an obligation for unsatisfactory performance, which is not governed by normal warranty provisions; Shipped machinery invoiced at P 300,000 to a destination specified by the buyer. A significant part of the transaction involves installation that has not been fulfilled by Keppel Corp.; Sold at P 500,000 a machinery to Aboitiz Corp, where Aboitiz has the right to cancel the purchases for a reason not specified in the contract of sale and the seller is uncertain about the outcome. How much should be recognized by Keppel Corp as revenue from the above transactions? * A. P 0 B. P 1, 000, 000 C. P 700, 000 D. P 500, 000