Financial Accounting
5th Edition
ISBN: 9780134728643
Author: Robert Kemp; Jeffrey Waybright
Publisher: Pearson Education (US)
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Chapter 2, Problem 32AP
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(Learning Objectives 4, 5: Account for accounts receivable and uncollectible receivables) On November 30, Palmer Party Planners had a $41,000 balance in Accounts Receivableand a $3,584 credit balance in Allowance for Uncollectible Accounts. During December, Palmermade credit sales of $200,000. December collections on account were $168,000, and write-offsof uncollectible receivables totaled $2,910. Uncollectible-account expense is estimated as 1% ofcredit sales. No sales returns are expected. Ignore cost of goods sold.Requirements1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-accountexpense by the allowance method during December. Explanations are not required.2. Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts,and Net Accounts Receivable at December 31. How much does Palmer expect to collect?3. Show how Palmer Party Planners will report Accounts Receivable and net sales on itsDecember 31 balance sheet and income…
(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales allowances) Niagara Jewelry sells to retailers who then resell the products. Niagaradoes not offer sales discounts for early payment; it asks that customers pay in full within15 days or at the point of sale with a credit card. The company had the following selectedtransactions during July:July 2 Sold $150,000 of merchandise to Lakeside Jewels on account.Sold $12,000 of merchandise to Superior Crystals, which paid by credit card. Thecredit card company charges Niagara a fee of 2% on credit card sales.July 17Shining Stones noticed that some of the merchandise received was damaged, so itreturned $17,000 worth of merchandise to Niagara.July 30July 3July 16July 19Shining Stones paid the balance of what it owed for the purchase on July 17.Lakeside Jewels paid the balance of what it owed for the purchase on July 2.Sold $185,000 of merchandise to Shining Stones on account.Requirements1. Journalize Niagara’s…
(Learning Objective 4: Account for accounts receivable) Perform the followingaccounting tasks for the receivables of Able and Bowman, a law firm, at December 31, 2018.Requirements1. Set up T-accounts for Cash, Accounts Receivable, and Service Revenue. Start with thebeginning balances as follows: Cash $28,000; Accounts Receivable $103,000; and ServiceRevenue $0. Post the following 2018 transactions to the T-accounts:a. Service revenue of $705,000, all on accountb. Collections on account, $713,0002. What are the ending balances of Cash, Accounts Receivable, and Service Revenue?
Chapter 2 Solutions
Financial Accounting
Ch. 2 - The order in which assets were listed and...Ch. 2 - Prob. 2DQCh. 2 - How is revenue related to retained earnings?Ch. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Distinguish between journalizing and posting.Ch. 2 - True or false: If the trial balance is in balance,...Ch. 2 - When it is time to prepare the financial...
Ch. 2 - Which sequence of actions correctly summarizes the...Ch. 2 - Prob. 2SCCh. 2 - Prob. 3SCCh. 2 - Prob. 4SCCh. 2 - Prob. 5SCCh. 2 - Which journal entry records obtaining a bank loan...Ch. 2 - RV Wholesale, Inc., paid 1,200 for supplies and...Ch. 2 - Prob. 8SCCh. 2 - Prob. 9SCCh. 2 - Prob. 10SCCh. 2 - Prob. 11SCCh. 2 - Prob. 12SCCh. 2 - Prob. 1SECh. 2 - Prob. 2SECh. 2 - Prob. 3SECh. 2 - Prob. 4SECh. 2 - Accounting terminology (Learning Objectives 2, 3, ...Ch. 2 - Effects of debits and credits on accounts...Ch. 2 - Balancing accounts and normal balances (Learning...Ch. 2 - Types of accounts and effects of debits and...Ch. 2 - Re-creating journal entries from T-account...Ch. 2 - Journalizing transactions (Learning Objective 3)...Ch. 2 - Prob. 11SECh. 2 - Prob. 12SECh. 2 - Prob. 13SECh. 2 - Accounting terminology (Learning Objectives 1, 2,...Ch. 2 - Prob. 15AECh. 2 - Journalizing transactions (Learning Objective 3)...Ch. 2 - Prob. 17AECh. 2 - Balancing accounts and preparing a trial balance...Ch. 2 - Prob. 19AECh. 2 - Prob. 20AECh. 2 - Prob. 21AECh. 2 - Prob. 22AECh. 2 - Prob. 23BECh. 2 - Prob. 24BECh. 2 - Prob. 25BECh. 2 - Balancing accounts and preparing a trial balance...Ch. 2 - Recording transactions and preparing a trial...Ch. 2 - Prob. 28BECh. 2 - Prob. 29BECh. 2 - Prob. 30BECh. 2 - Prob. 31APCh. 2 - Prob. 32APCh. 2 - Journalizing, posting, and preparing a trial...Ch. 2 - Prob. 34APCh. 2 - Preparing a trial balance, income statement,...Ch. 2 - Prob. 36APCh. 2 - Prob. 37BPCh. 2 - Prob. 38BPCh. 2 - Prob. 39BPCh. 2 - Prob. 40BPCh. 2 - Prob. 41BPCh. 2 - Prob. 42BPCh. 2 - Prob. 1CECh. 2 - Prob. 1CPCh. 2 - Prob. 1CFSAPCh. 2 - Prob. 1EIACh. 2 - Prob. 2EIACh. 2 - Prob. 1FACh. 2 - Prob. 1IACh. 2 - Prob. 1SBACh. 2 - Prob. 1WC
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- The College Store accepts MasterCard for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. MasterCard charges a 1.55% collection fee. Credit card drafts totalling $10,000 are deposited during August. What increases when recording the sales and deposits? accounts receivable by $9,854 service charge expense by $155 sales by $ 9,854 cash by $10,000arrow_forward(Learning Objectives 1, 4, 5, 6: Apply GAAP for revenue, receivables,collections, and uncollectibles using the percent-of-sales method; account for notesreceivable) Hopewell Shipping Corporation is an overnight shipper. Since it sells on credit, thecompany cannot expect to collect 100% of its accounts receivable. At October 31, 2018, and2019, respectively, Hopewell reported the following on its balance sheet (in millions of dollars):October 31,2019 2018Accounts receivable.................................................. $4,200 $4,000Less: Allowance for uncollectible accounts...............Accounts receivable, net........................................... $4,030 $3,840(170) (160)During the year ended October 31, 2019, Hopewell earned service revenue and collected cashfrom customers. Assume uncollectible-account expense for the year was 5% of service revenueon account and Hopewell wrote off uncollectible receivables and made other adjustments as necessary (see below). At year-end,…arrow_forward(Learning Objective 5: Evaluate collectibility using the allowance for uncollectibleaccounts) During its first year of operations, Spring Garden, Inc., had sales of $439,000, all onaccount. Industry experience suggests that Spring Garden’s uncollectibles will amount to 4% ofcredit sales. At December 31, 2018, accounts receivable total $59,000. The company uses theallowance method to account for uncollectibles.1. Make Spring Garden’s journal entry for uncollectible-account expense using thepercent-of-sales method.2. Show how Spring Garden should report accounts receivable on its balance sheet atDecember 31, 2018.arrow_forward
- SUNDAY about:blank lawkes Learning | Home ion II Saved Help Save & Exit Egrane, Inc.s monthly bank statement showed the ending balance of cash of $14,800. The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,200, outstanding checks of $1,600, a NSF check of $560, bank service charges of $24 and the EFT from a customer in payment of the customer's account of $1,200. What journal entry should be recorded by Egrane for the EFT? =32 Multiple Choice Debit Cash and credit Sales Revenue for $1,200. No journal entry is necessary for this item. Debit Accounts Receivable and credit Cash for $1,200. Debit Cash and credit Accounts Receivable for $1,20. MacBook DII DD 吕0 F8 F9 F10 F3 F4 F5 F6 F7 #3 24 & へ 4. 6 7 8 9 T Y つarrow_forwardTasks 8-9. Application. Prepare the journal entries of the transaction below and post them to the necessary ledger books. Write your answer on a separate sheet of paper. Olson Sala Company completed the following sales transactions during the month of June 2015. All credit sales have terms of 3/10, n/30 and all invoices are dated as at the transaction date. June 1 Olson Sala invested Php 52,000 of his funds in the business. 1 Sold merchandise on account to R. Bituin, Php 32,000. Invoice no. 377 Sold merchandise on account to A. Perdales, Php 54,000. Invoice no. 378 3 4 Sold merchandise for cash, Php 46,000. 7. Received payment from R. Bltuin less discounts. Received payment from A. Perdales less discounts. 9. Required: 1. Record the transactions in the general journal. 2. Post to the accounts receivable ledger. 3. Prepare a schedule of accounts receivable.arrow_forward(Learning Objectives 1, 2, 3, 4, 5: Account for and evaluate accounts receivableincluding returns, sales discounts, and uncollectible accounts) The balance sheet of Aqua,Inc., a world leader in the design and sale of telescopic equipment, reported the followinginformation on its balance sheets for 2018 and 2017 (figures are in thousands):$8,300(In thousands) December 31, 2018$8,560December 31, 2017Accounts receivable (net of allowance of $1,080 and $940,respectively)In 2018, Aqua recorded $15,700 (gross) in sales (all on account), of which $700 (gross) wasreturned for credit. The cost of sales was $7,700; the cost of the merchandise returned was $400.Aqua offers its customers credit terms of 2/10, n/30. Ninety percent of collections on accountsreceivable were made within the discount period. Aqua wrote off uncollectible accounts receivablein the amount of $120 (gross) during 2018. Sales returns are estimated to be 4% of sales.Requirements1. Calculate the amount of uncollectible…arrow_forward
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- Assume that you are going to start a Business after graduation. Describe 10 transactions that the business might undertake by using your own idea with the following assumptions: Started business with cash Goods purchase for cash Goods purchased on credit Any asset purchased and paid cash Any asset purchase on credit Sold goods for cash Sold goods on credit Paid any bill Paid salary to staff Cash withdraw from business for personal use Based on your own 10 transactions, prepare: 1. Journalarrow_forwardAssume that you are going to start a Business after graduation. Describe 10 transactions that the business might undertake by using your own idea with the following assumptions: Started business with cash Goods purchase for cash Goods purchased on credit Any asset purchased and paid cash Any asset purchase on credit Sold goods for cash Sold goods on credit Paid any bill Paid salary to staff Cash withdraw from business for personal use Based on your own 10 transactions, prepare: 1. Ledgerarrow_forwardfollowing transactions for 2021 from the books of the business. This company operates one bank account to reflect all cash and cheque transactions. You are now required to read these transactions carefully then prepare the relevant documents and books as outlined in the requirements below. 4/9 1 Aug Started business with $150, 000 in the bank 3 Aug Bought supplies on credit from Right Way Manufacturers 24 Boxes Air Filter $720.00 per box 96 Bottles fuel injector cleaner $200.00 per bottle 48 Boxes Spark Plug $300.00 per box 36 Boxes Brake Shoe $580.00 per box 24 Boxes Disc Pads $400.00 per box 5 Aug Provided services for cash less 10% discount 12 small motorbike engines $350.00 per engine 6 large motorbike engines (full service) $950.00 per engine 8 medium size motorbike engines (full service) $800.00 per engine 7 Aug Paid Rent by cheque $5,000.00 10 Aug Paid Wages by cheque $8,000.00 10 Aug Bought Fixtures from CT Limited $3,500.00 paying by cash 11 Aug Provided services on credit to…arrow_forward
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