Chapter 7 - CHAPTER 7 CHAPTER 7 BRIEF EXERCISE 7-1 Bad...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 7 CHAPTER 7 BRIEF EXERCISE 7-1 Bad Debts Expense 10,000 Allowance for Doubtful Accounts 10,000 To record estimated bad debts: 2% × $500,000. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income Allowance for Doubtful Accounts* (10,000) (10,000) Bad Debts Expense 10,000 (10,000) *The Allowance for Doubtful Accounts account has increased. It is shown as a decrease in the equation above because it is a contra account and causes total assets to decrease. BRIEF EXERCISE 7-2 Accounts Receivable Turnover = Net Credit Sales/Average Accounts Receivable Accounts Receivable Turnover = $240,000/[($40,000 + $20,000)/2] Accounts Receivable Turnover = $240,000/$30,000 = 8 times BRIEF EXERCISE 7-3 2010 Dec. 31 Interest Receivable 500 Interest Revenue 500 To record interest earned: $50,000 × 6% × 60/360. Balance Sheet Income Statement 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
CHAPTER 7 Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income Interest Receiv- able 500 500 Interest Rev- enue 500 500 BRIEF EXERCISE 7-4 July 20 Cash 9,600 Collection Fee Expense 400 Sales Revenue* 10,000 To record credit card sales. *Accounts Receivable if sale was already recorded. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income Cash 9,600 9,600 Sales Rev- enue 10,000 Collection Fee Expense 400 9,600
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/14/2011 for the course ACCT 2101 taught by Professor Christianwurst during the Spring '08 term at Temple.

Page1 / 7

Chapter 7 - CHAPTER 7 CHAPTER 7 BRIEF EXERCISE 7-1 Bad...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online