accounting 3000 hw#4

8/19/2019 Accounting 3000 Hw#4

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d.

e.

f.

Required:

Sa!ings accontat the ast $ay$an' "ith abalance of)*0+000. This

accont is beingsed toaccmlate cashfor ftre plantepansion 3in201-4.

)50+*00 in a

chec'ing accontat the ast $ay$an'. Thebalance in theaccontrepresents a 1*compensatingbalance for a)20+000 loan"ith the ban'.Red Wing maynot "ithdra" thefnds ntil theloan is de in201/.

.S. Treasrybills( 27monthmatrity billstotaling ),2+000+and 7month billstotaling ),+000.


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1

8etermine thecorrect balanceof cash and casheqi!alents to bereported in the

crrent assetsection of the2016 balancesheet.


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ate -ene!al *ou!nal e)it

.a!ch 1% &llo/ance o! uncollecti)le accounts $ 2,200

&ccounts !eciva)le

.a!ch 30 ote !ecieva)le $ 2%,000

ote aa)le

.a 30 inte!est !ecieva)le $ 3"0

inte!est !evenue

.a 30 Cash $ 2",#%3

oss on Sale o note !ecieva)le $ 38%

ote 4eceiva)le

nte!est !eceivea)le

*une 30 &ccounts 4eceiva)le $ 1%,000

Sales 4ev

*ul 8 Cash $ 1",6#0

Sales iscounts $ 510

&ccounts 4eceiva)le

&ugust 31 ote !eceiva)le $ %,000

discount on note !ec 7

investents

gain on sale o investents

ec 31 Bad e)t Epense $ %,500

&llo/ance o! uncollecti)le accounts

4eco!d &cc!ued inte!est iscount on note !ec 7

ec 31 nte!est !ev


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C!edit

$ 2,200

$ 2%,000

$ 3"0

$ 2%,000

$ 3"0

$ 1%,000

$ 1%,000

$ 5,500

7

$ %,500

7


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*ou!nal Ent! +o!ksheet

&ccounts !eceiva)le o $2,200 /e!e /!itten o9 as uncollecti)le' (he copan uses the allo/an

oaned an o:ce! o the copan $2%,000 and !eceived a note !equi!ing p!incipal and inte!est

iscounted the $2%,000 note at a local )ank' (he )ankace &ount o ote

nte!est to atu!it ? @$2%,000 = 8;A

.atu!it alue ? $2%,000 21"0 ?$2#,1"0

iscount ? @$2#,1"0 = #; = 10D12A ? $218%

Cash ? 2#,1"0 218% ? $2"#%3

Sold e!chandise to the Blankenship Copan o! $1%,000' (e!s o the sale a!e 3D10, nD30' +

The Blankenship Company paid its account in full.

Record the sale of stock with a book value of $5,500 and accepted a $,000 noninterest!bearin" not

Bad debt e)pense is estimated to be ( of credit sales for the year. Credit sales for &0(* were $50


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*o

Event -ene!al *ou!nal e)it

1 &llo/ance o! uncollecti)le accounts $ 56,000

&ccounts 4ec

2 &ccounts 4eceiva)le $ 6,500


3 Cash $ 6,500

&ccounts 4ec

*ou!

Event -ene!al *ou!nal e)it

a Bad e)t Epense $ %3,000


) Bad e)t Epense $ 6",300


c Bad e)t Epense $ 66,210



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u!nal Ent!

C!edit

4eco!d accounts !eceiva)le /!itten o9 du!ing t

$ 56,000

$ 6,500 4eco!d ent! to !einstate an account !eceiva)l

$ 6,500 4eco!d collection o an account !eceiva)le p!e

al Bad e)ts

C!edit

Bad de)t epense is estiated to )e 6; o c!e

$ %3,000

Bad de)t epense is estiated ) coputing

$ 6",300

2015 4eceiva)les

et allo/ance o! uncollecta)le accounts

C!edit sales

Cash Collections

+!itten o9 accounts !ec

&llo/ance o! uncollecta)le accounts

net allo/ance o! uncollecta)le accounts

/!itten o9 accounts !ec

collected /!ite o9

&llo/ance o! dou)tul accounts

$ 66,210 Bad de)t epense is estiated ) coputing

&ge g!oup

0"0

"1#0

#1120

ove! 120


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he ea! 201"'

p!eviousl /!itten o9'

iousl /!itten o9'

dit sales o! the ea!'

et !ealiFa)le value o the !eceiva)les' (he allo/ance o! uncollecti)le accounts is estiated

$ 50%,000

$ 65,000

$ 1,825,000

$ @1,#05,000A

$ @56,000A

$ 618,000

$ 65,000

$ @56,000A

$ 6,500

$ @6,500A

et !ealiFa)le value o the !eceiva)les' (he allo/ance o! uncollecti)le accounts is dete!ine

; o ea! end ! ; uncollecti)le Bad de)t

%0; 0'05 $ 16,"30

20; 0'15 $ 12,560

5; 0'2 $ 6,180

5; 0'6 $ 8,3"0

(otal $ 3#,%10

e)it )ala $ 6,500

$ 66,210


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to )e 10; o the ea!end )alance in accounts !eceiva)le'

d ) an aging o accounts !eceiva)le'


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*ou!nal Ent!

ate -ene!al *ou!nal e)it C!edit

*ul 1 Cash $ 5"0,000

ote aa)le $ 5"0,000

*ul 201" cash $ "%2,000

accounts !ec $ "%2,000

*ul 31 nte!est Epense $ 6,200

ote paa)le $ 5"0,000

Cash $ 5"6,200

*ou!nal Ent!

ate -ene!al *ou!nal e)it C!edit

*ul 1 Cash $ 55",800

oss on (!anse! o !ec $ 23,200&ccounts !ec $ 580,000

Gul 31 Cash $ 208,000

&ccounts 4ec $ 208,000


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nce as collate!al'

a)les a!e collected on *ul 31'

the aount o !eceiva)les collected plus #; inte!est on the unpaid )alance o the not

)ank /ill cha!ge a 6; acto!ing ee on the aount o !eceiva)les t!anse!!ed'

a)les a!e collected on *ul 31' (he )ank /ill collect the t!anse!!ed !eceiva)les di!ectl'


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e at the )eginning o the pe!iod'


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*ou!nal Ent!


28>e) ote 4ec $ 20,000

sales 4ev

31.a! ote 4eceiva)le $ 18,000

iscount on note !ecsales !ev

3&p! &ccount !ec $ 1%,000

Sales !ev

11&p! Cash $ 1",320

Sales iscount

&ccounts 4eceiva)le

1%&p! Sales 4etu!n $ ",500

&ccounts 4eceiva)le

nvento! $ 6,%00

Cost o -oods Sold

30&p! Cash $ "3,050

oss on Sale o &4 $ 1,#50

&ccounts 4ec

30*un nte!est 4eceiva)le $ 800

nte!est 4ev

30*un Cash $ 20,"51

oss on Sale o ote 4eceiva)le $ 16#

nte!est 4eceiva)le

ote 4eceiva)le

30Sep o Gou!nal Ent! 4eq

*ou!nal Ent!



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C!edit

Sold e!chandise to enno, nc' o! $20,000 and accepte

$ 20,000

Sold e!chandise to .addo Co' and accepted a noninte!

$ 2,1"0$ 15,860

Sold e!chandise to Ca!! Co' o! $1%,000 /ith te!s 6D10,

$ 1%,000

Collected the entire amount due from Carr Co

$ "80 777

$ 1%,000

& custoe! !etu!ned e!chandise costing $6,%00' Eve!g!

$ ",500

& custoe! !etu!ned e!chandise costing $6,%00'

$ 6,%00

(!anse!!ed !eceiva)les o $"5,000 to a acto! /ithout !ec

$ "5,000

$ 800

>ace &ount $ 20,000

nte!est to .atu!it $ 1,600

.atu!it value $ 21,600

$ 800 iscount $ %6#

$ 20,000 Cash $ 20,"51

+enno), nc., paid the note amount plus interest to the bank

C!edit


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$ 1,"20


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d a 12;, %onth note' 12; is an app!op!iate !ate o! this tpe o note'

st)ea!ing note /ith a discount !ate o 12;' (he $18,000 paent is due on .a!ch 31

nD30' Eve!g!een uses the g!oss ethod to account o! cash discounts'

en !educed the custoe!


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, 201%'

ndise' Sales !etu!ns a!e !eco!ded ) the copan as the occu!'

' (he sale c!ite!ia a!e et'


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accounting 3000 hw#4

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