Chp-06 - Chapter 6 Reporting and Interpreting Sales Revenue...

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Chapter 6 Reporting and Interpreting Sales Revenue, Receivables, and Cash ANSWERS TO MULTIPLE CHOICE 1. d) 2. b) 3. b) 4. d) 5. b) 6. c) 7. d) 8. b) 9. d) 10. c) EXERCISES E6–1. Sales revenue ($1,000 + $900 + $500) ...................................... $2,400 Less: Sales discount ($1,000 collected from S. Green x 2%)... 20 Net sales ..................................................................................... $2,380 E6–3. Sales revenue ($400 + $5,000 + $6,000) ................................... $11,400 Less: Sales returns and allowances ( 1 / 10 x $6,000 from D) ........ 600 Less: Sales discounts ( 9 / 10 x $6,000 from D x 3%) ..................... 162 Less: Credit card discounts ($400 from B x 2%) ........................ 8 Net sales ..................................................................................... $10,630 E6–4. Cost of Transaction Net Sales Goods Sold Gross Profit July 12 + 297 + 200 + 97 July 15 + 5,000 + 3,000 + 2,000 July 20 – 150 NE – 150 July 21 – 1,000 – 600 – 400 E6–8.
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(a) Bad debt expense (+E, –SE) ($650,000 x 0.02) ........ 13,000 Allowance for doubtful accounts (+XA, –A) ....... 13,000 To record estimated bad debt expense. (b) Allowance for doubtful accounts (–XA, +A) ............... 1,000 Accounts receivable (–A) ................................... 1,000 To write off a specific bad debt. PROBLEMS P6–1. Case A Because McDonald's collects cash when the coupon books are sold, cash collection is not an issue in this case. In order to determine if the revenue has been earned, the student must be careful in analyzing what McDonald's actually sold. Students who
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