3101 Homework Solutions ch0.07

3101 Homework Solutions ch0.07 - Acct 3101 Intermed. Acctg...

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Acct 3101 Intermed. Acctg 1 Homework Solutions Text: Kieso et al. 13 th ed. Chapter 7 EXERCISE 7-14 1. Cash. ........................................................................ ................................................................................. 18,000 Loss on Sale of Receivables ($20,000 X 10%). ................................................. 2,000 Accounts Receivable. ................................... 20,000 2. Cash . ...................................................................... 50,600 Finance Charge ($55,000 X 8%). ......................... 4,400 Notes Payable. .............................................. 55,000 3. Bad Debt Expense. ................................................. 5,850 Allowance for Doubtful Accounts [($82,000 X 5%) + $1,750]. ...................... 5,850 4. Bad Debt Expense. ................................................. 6,450 Allowance for Doubtful Accounts ($430,000 X 1.5%). ................................... 6,450 File: 3101 homework solutions ch.07 Page 1
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EXERCISE 7-15 Computation of net proceeds: Cash received. ............................................................................. $190,000 Less: Recourse liability. ............................................................ 2,000 Net proceeds. .............................................................................. $188,000 Computation of gain or loss: Carrying value. ........................................................... $200,000 Net proceeds. ............................................................... 188,000 Loss on sale of receivables. ........................................ $ 12,000 The following journal entry would be made: Cash. ............................................................................ $190,000
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This note was uploaded on 04/29/2011 for the course ACCT 3001 taught by Professor Erickson during the Spring '10 term at University of Minnesota Duluth.

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3101 Homework Solutions ch0.07 - Acct 3101 Intermed. Acctg...

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