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Unformatted text preview: EXERCISES: SET B E9-1B Presented below are selected transactions of Glasgow Company. Glasgow sells in large quantities to other companies and also sells its product in a small retail outlet. March 1 Sold merchandise on account to O’Brien Company for $5,000, terms 2/10, n/30. 3 O’Braen Company returned merchandise worth $700 to Glasgow. 9 Glasgow collected the amount due from O’Brien Company from the March 1 sale. 15 Glasgow sold merchandise for $600 in its retail outlet.The customer used his Glasgow credit card. 31 Glasgow added 1.5% monthly interest to the customer’s credit card balance. Instructions Prepare journal entries for the transactions above. E9-2B Presented below are two independent situations. (a) On January 6, Pear Co. sells merchandise on account to Portland Inc. for $6,500, terms 2/10, n/30. On January 16, Portland Inc. pays the amount due. Prepare the entries on Pear’s books to record the sale and related collection. (b) On January 10, Martha Stewart uses her Apple Co. credit card to purchase merchandise from Apple Co. for $6,500. On February 10, Stewart is billed for the amount due of $6,500. On February 12, Stewart pays $4,000 on the balance due. On March 10, Stewart is billed for the amount due, including interest at 2% per month on the unpaid balance as of February 12. Prepare the entries on Apple Co.’s books related to the transactions that occurred on January 10, February 12, and March 10. E9-3B The ledger of Nixon Company at the end of the current year shows Accounts Receivable $180,000, Sales $1,800,000, and Sales Returns and Allowances $60,000. Instructions (a) If Nixon uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Nixon determines that Willie’s $2,900 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $4,300 in the trial balance, jour- nalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $410 in the trial balance, journal- ize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable....
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This note was uploaded on 09/19/2010 for the course ACCT 220 taught by Professor Ullmann during the Fall '10 term at University of Nebraska Kearney.
- Fall '10