Question 12 of 40 In June, Widgets, Inc. makes on account sales to Customs Motors of $800 and receives a payment of $500 from them. How would this affect the Accounts Receivable control account? A. The AR total would be increased by $300. B. The AR total would be decreased by $500. O C. The AR total would be decreased by $300. D. The AR total would be increased by $800.

Question 12 of 40 In June, Widgets, Inc. makes on account sales to Customs Motors of $800 and receives a payment of $500 from them. How would this affect the Accounts Receivable control account? A. The AR total would be increased by $300. B. The AR total would be decreased by $500. O C. The AR total would be decreased by $300. D. The AR total would be increased by $800.

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 18P

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Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford Co., 24,000. The cost of goods sold was 14,400. I3. Sold merchandise on account to Dry Creek Co., 60,000. The cost of goods sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account, terms 2/10, n/30, to Halloran Co., 13,500. Record the sale net of the 2% discount. The cost of goods sold was 8,100. 15. Received from Halloran Co. the amount of the invoice of October 5, less 2% discount. Instructions Journalize the entries to record the transactions.
Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford Co., 24,000. The cost of the merchandise sold was 14,400. 13. Sold merchandise on account to Dry Creek Co., 60,000. The cost of merchandise sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account to Halloran Co., 13,500. The cost of the merchandise sold was 8,100. 15. Received from Halloran Co. the amount of the invoice of October 5. Instructions Journalize the entries to record the transactions.
Exercise 4-54 Operating Cycle and Current Receivables a. Dither and Sly are attorneys-at-law who specialize in federal income tax law. The): complete their typical case in 6 months or less and collect from the typical client within 1 additional month. b. Johnstons Market specializes in fresh meat and fish. All merchandise must be sold within one week of purchase. Almost all sales are for cash and any receivables are generally paid by the end of the following month. c. Mortondos is a womens clothing store specializing in high-style merchandise. Merchandise spends an average of 7 months on the rack following purchase. Most sales are on credit and the typical customer pays within 1 month of sale. d. Trees Inc. grows Christmas trees and sells them to various Christmas tree lots. Most sales are for cash. It takes 6 years to grow a tree. Required: For each of the businesses described above, indicate the length of the operating cycle.
Entries for notes receivable The series of five transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed. Briefly describe each transaction. Cash Notes Receivable (e) 76,500 (c) 75,000 (d) 75,000 Accounts Receivable Cost of Goods Sold (a) 75,000 (c) 75,000 (b) 45,000 (d) 75,400 (b) 75,400 Inventory Interest Revenue (b) 45,000 (d) 400 (e) 1,100 Sales (a) 75,000
Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8 % note. Feb. 10. Sold merchandise on account to Bradford Co., 24, 000. The cost of the merchandise sold was 14,400. 13. Sold merchandise on account to Dry Creek Co., 60,000. The cost of merchandise sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5.Sold merchandise on account to Halloran Co. 13,500. The cost of the merchandise sold was 8, 100. 15 Received from Halloran Co. the amount of the invoice of October 5, less 2 % discount. Instructions Journalize the entries to record the transactions.
Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford Co., 24,000. The cost of goods sold was 14,400. I3. Sold merchandise on account to Dry Creek Co., 60,000. The cost of goods sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account, terms 2/10, n/30, to Halloran Co., 13,500. Record the sale net of the 2% discount. The cost of goods sold was 8,100. 15. Received from Halloran Co. the amount of the invoice of October 5, less 2% discount. Instructions Journalize the entries to record the transactions.