Chapter 7 assignments and solutions

Chapter 7 assignments and solutions - 8,000 Give journal...

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CHAPTER 7 HOMEWORK - SOLUTIONS Ex. 7-134 —Asset classification. Below is a list of items. Classify each into one of the following balance sheet categories: a. Cash c. Short-term Investments b. Receivables d. Other ____ 1. Compensating balances held in long-term borrowing arrangements ____ 2. Savings account ____ 3. Trust fund ____ 4. Checking account ____ 5. Postage stamps ____ 6. Treasury bills maturing in six months ____ 7. Post-dated checks from customers ____ 8. Certificate of deposit maturing in five years ____ 9. Common stock of another company (to be sold by December 31, this year) ____ 10. Change fund Solution 7-134 1. d 3. d 5. d 7. b 9. c 2. a 4. a 6. c 8. d 10. a
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Ex. 7-136 —Entries for bad debt expense. A trial balance before adjustment included the following: Debit Credit Accounts receivable $80,000 Allowance for doubtful accounts 730 Sales $340,000 Sales returns and allowances
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Unformatted text preview: 8,000 Give journal entries assuming that the estimate of uncollectibles is determined by taking (1) 5% of gross accounts receivable and (2) 1% of net sales. Solution 7-136 (1) Bad Debt Expense . ................................................................ 3,270 Allowance for Doubtful Accounts . ........................... 3,270 Gross receivables $80,000 Rate 5% Total allowance needed 4,000 Present allowance (730 ) Adjustment needed $ 3,270 Solution 7-136 (cont.) (2) Bad Debt Expense . ................................................................ 3,320 Allowance for Doubtful Accounts . ........................... 3,320 Sales $340,000 Sales returns and allowances 8,000 Net sales 332,000 Rate 1% Bad debt expense $ 3,320...
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Chapter 7 assignments and solutions - 8,000 Give journal...

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