The following series of transactions occurred during 2020 and 2021 when Jenna Corp. sold merchandise To Rachel Lee. Jenna Corp's annual accounting period ends on December 31. Assume 28 days in the Month of February. 1-Oct-20 Sold $42,000 of merchandise (cost $35,000) to Rachel Lee, terms 1/15, n/45. 15-Nov-20 Rachel indicated she won't be able to pay the account until early next year. She agrees to change the account to a 120 day. 10% note receivable. 31-Dec-20 Prepared the adjusting entry to record accrued interest. 16-Mar-21Jenna receives a cheque from Rachel Lee for the maturity value of the note. 22-Mar-21Jenna receives notification that Rachel Lee's cheque is being returned for non- sufficient funds. 31-Dec-21Jenna decides to write off Rachel Lee's account as uncollectible. Jenna.uses the Allowance method of accounting for bad debts. Prepare Jenna Corp.'s journal entries to record the above transactions.

The following series of transactions occurred during 2020 and 2021 when Jenna Corp. sold merchandise To Rachel Lee. Jenna Corp's annual accounting period ends on December 31. Assume 28 days in the Month of February. 1-Oct-20 Sold $42,000 of merchandise (cost $35,000) to Rachel Lee, terms 1/15, n/45. 15-Nov-20 Rachel indicated she won't be able to pay the account until early next year. She agrees to change the account to a 120 day. 10% note receivable. 31-Dec-20 Prepared the adjusting entry to record accrued interest. 16-Mar-21Jenna receives a cheque from Rachel Lee for the maturity value of the note. 22-Mar-21Jenna receives notification that Rachel Lee's cheque is being returned for non- sufficient funds. 31-Dec-21Jenna decides to write off Rachel Lee's account as uncollectible. Jenna.uses the Allowance method of accounting for bad debts. Prepare Jenna Corp.'s journal entries to record the above transactions.

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

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 14E: On January 5, 2019, ShoeKing Corp. sells for cash 500 pairs of volleyball shoes to FootAction, a...

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The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000
Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.
On January 5, 2019, ShoeKing Corp. sells for cash 500 pairs of volleyball shoes to FootAction, a shoe retailer, for 70 each. FootAction has the right to return the shoes for any reason up to March 31, 2019, for a full refund. The cost of each pair of shoes is 32. ShoeKing predicts that it is probable that 40 pairs of the shoes will be returned. ShoeKing uses the perpetual method for inventory. Required: 1. Prepare ShoeKings journal entry on January 5, 2019, to account for this transaction. 2. Assume that FootAction returns 35 pairs of shoes on March 31, 2019. Prepare the journal entry to record this return.
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.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
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