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Sleepy Recliner Chairs

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P8-37B Accounting for uncollectible accounts (aging of accounts method),
card sales, notes receivable, and accrued interest revenue [20–30 min]
Sleepy Recliner Chairs completed the following selected transactions:

Jul 1 Sold inventory to Go – Mart, receiving a $37,000,
nine-month, 8% note. Ignore cost of goods sold.

Oct 31 Recorded credit- and debit-card sales for the period of $19,000.

Nov 3 Card processor drafted company’s checking account for
processing fee of $420.

Dec 31 Made an adjusting entry to accrue interest on the
Go – Mart note.

Dec 31 Made an adjusting entry to record uncollectible account
expense based on an aging of accounts receivable. The
aging schedule shows that $14,100 of accounts receivable
will not be collected. Prior to this adjustment, the credit
balance in Allowance for uncollectible accounts is $10,200.

Apr 1 Collected the maturity value of the Go – Mart note.

Jun 23 Sold merchandise to Appeal, Corp., receiving a 60-day, 12%
note for $7,000. Ignore cost of goods sold.

Aug 22 Appeal, Corp., dishonored its note (failed to pay) at maturity;
we converted the maturity value of the note to an account

Nov 16 Loaned $23,000 cash to Creed, Inc., receiving a 90-day,
16% note.

Dec 5 Collected in full on account from Appeal, Corp.

Dec 31 Accrued the interest on the Creed, Inc., note.

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