solutions ch07 - AIM 3331-OU1 Chapter 7 BRIEF EXERCISE 7-6...

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AIM 3331-OU1 Chapter 7 BRIEF EXERCISE 7-6 11/1/07 Notes Receivable ..................................................... 20,000 Sales ............................................................. 20,000 12/31/07 Interest Receivable ................................................... 200 Interest Revenue .......................................... 200 ($20,000 X 6% X 2/12) 5/1/08 Cash ..................................................................... 20,600 Notes Receivable ......................................... 20,000 Interest Receivable ....................................... 200 Interest Revenue .......................................... 400 ($400 = $20,000 X 6% X 4/12) BRIEF EXERCISE 7-7 Notes Receivable ............................................................................ 20,000 Discount on Notes Receivable ............................................ 4,056 Cash .................................................................................... 15,944 Discount on Notes Receivable ........................................................ 1,913 Interest Revenue ................................................................. 1,913 $15,944 X 12% = $1,913 Discount on Notes Receivable ........................................................ 2,143 Interest Revenue ................................................................. 2,143 ($15,944 + $1,913) X 12% = $2,143 Cash ................................................................................................ ........................................................................................................ 20,000 1
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AIM 3331-OU1 Chapter 7 Notes Receivable ................................................................ 20,000 EXERCISE 7-5 (15–20 minutes) (a) (1) June 3 Accounts Receivable—Chester .......................................... 3,000 Sales ........................................................................ 3,000 June 12 Cash ..................................................................................... ............................................................................................. 2,940 Sales Discounts ($3,000 X 2%) .......................................... 60 Accounts Receivable—Chester .............................. 3,000 (2) June 3 Accounts Receivable—Chester .......................................... 2,940 Sales ($3,000 X 98%) ............................................. 2,940 June 12 Cash ..................................................................................... ............................................................................................. 2,940 Accounts Receivable—Chester .............................. 2,940 (b) July 29 Cash ............................................................................ 3,000 Accounts Receivable—Chester .......................... 2,940 Sales Discounts Forfeited ................................... 60 EXERCISE 7-8 (15–20 minutes) (a) Allowance for Doubtful Accounts ............................................. 6,000 Accounts Receivable ...................................................... 6,000 (b) Accounts Receivable $800,000 Less: Allowance for Doubtful Accounts 40,000 2
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AIM 3331-OU1 Chapter 7 Net realizable value $760,000 (c) Accounts Receivable $794,000 Less: Allowance for Doubtful Accounts 34,000 Net realizable value $760,000 3
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