09 - Class Exercises - receivable. (c) If Allowance for...

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ACC211 NVCC-Annandale Mitchell Chapter 9 – Class Exercises 1. What are the three categories of receivables? 2. What are the two methods to account for uncollectible accounts? Which method is acceptable under GAAP? 3. One of the methods uses bases to determine bad debt expense. Which method uses bases and what are the two bases? 4. Who are the two key parties to a note, and what entry does each party make when the note is issued? 5. E9-3B The ledger of Dixon Company at the end of the current year shows Accounts Receivable $180,000, Sales $1,800,000, and Sales Returns and Allowances $60,000. (a) If Dixon uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Dixon 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, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts
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Unformatted text preview: receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $410 in the trial balance, journalize 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. 6. E9-12B Mikes Stores had the following select transactions. Apr. 1, 2008 Accepted Otis Companys 1-year, 12% note in settlement of a $30,000 account receivable. July 1, 2008 Loaned $50,000 cash to Dan Hampton on a 9-month, 10% note. Dec. 31, 2008 Accrued interest on all notes receivable. Apr. 1, 2009 Received principal plus interest on the Otis note. Apr. 1, 2009 Dan Hampton dishonored its note; Mikes expects it will eventually collect. Prepare journal entries to record the transactions. Mikes Stores prepares adjusting entries once a year on December 31....
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This note was uploaded on 02/28/2011 for the course ACC 211 taught by Professor Mitchell during the Spring '11 term at Northern Virginia Community College.

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