Connect Acct 211 Week 6 Assignment fall 2105

Acct 2112014 Spring D-

Assignment:

Week 6

1.

Exercise 9-3 Direct write-off method LO P1

Dexter Company applies the direct write-off method in accounting for uncollectible accounts.

March	11	Dexter determines that it cannot collect $8,000 of its accounts receivable from its customer Lester Company.
	29	Lester Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt.

Prepare journal entries to record the above selected transactions of Dexter.

2.

Exercise 9-4 Percent of sales method; write-off LO P2

At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $902,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $451 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.

Prepare the journal entries of Chan to record these transactions and events of December 31, February 1, and June 5.

3.

Exercise 9-5 Percent of accounts receivable method LO P2

At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2013, it has outstanding accounts receivable of $107,500, and it estimates that 4% will be uncollectible.

Prepare the adjusting entry to record bad debts expense for year 2013 under the assumption that the Allowance for Doubtful Accounts has
(a)	a $1,828 credit balance before the adjustment.
(b)	a $538 debit balance before the adjustment.

Adjusting entries (all dated December 31, 2013).

4.

Exercise 9-10 Selling and pledging accounts receivable LO C3

On June 30, Petrov Co. has $131,900 of accounts receivable.

July	4	Sold $6,330 of merchandise (that had cost $4,051) to customers on credit.
	9	Sold $18,466 of accounts receivable to Main Bank. Main charges a 6% factoring fee.
	17	Received $3,482 cash from customers in payment on their accounts.
	27	Borrowed $10,552 cash from Main Bank, pledging $13,718 of accounts receivable as security for the loan.

Prepare journal entries to record the above selected July transactions. (The company uses the perpetual inventory system.)(If no entry is required for a particular transaction, select “No journal entry required” in the first account field.)

5.

Exercise 9-11 Honoring a note LO P3

Following are selected transactions for Vitalo Company.

Nov.	1	Accepted a $17,000, 180-day, 8% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.
Dec.	31	Adjusted the year-end accounts for the accrued interest earned on the White note.
Apr.	30	White honors her note when presented for payment; February has 28 days for the current year.

First, complete the table below to calculate the interest amounts at December 31stand April 30th.(Use 360 days a year.)

Use those calculated values to prepare your journal entries.

6.

Exercise 9-12 Dishonoring a note LO P3

Following are selected transactions for Ridge Company.

Mar.	21	Accepted a $9,300, 180-day, 8% note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable.
Sept.	17	Jackson dishonors her note when it is presented for payment.
Dec.	31	After exhausting all legal means of collection, Ridge Company writes off Jackson’s account against the Allowance for Doubtful Accounts.

First, complete the table below to calculate the interest amounts at September 17.(Use 360 days a year.)

Use the calculated value to prepare your journal entries.

Problem 9-3A Estimating and reporting bad debts LO P2

[The following information applies to the questions displayed below.]

At December 31, 2013, Hawke Company reports the following results for its calendar-year.

Cash sales	$	2,029,550
Credit sales		3,316,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable	$	1,004,748	debit
Allowance for doubtful accounts		15,270	debit

7.

Problem 9-3A Part 1

Required:
1.	Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.

a.	Bad debts are estimated to be 3% of credit sales.
b.	Bad debts are estimated to be 2% of total sales.
c.	An aging analysis estimates that 6% of year-end accounts receivable are uncollectible.

Adjusting entries (all dated December 31, 2013).

8.

Problem 9-3A Part 2

2.	Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2013, balance sheet given the facts in part 1a.

9.

Problem 9-3A Part 3

3.	Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2013, balance sheet given the facts in part 1c.