SSNT7_Cash2 - Cash and Receivables Recap Example 1 Jandro...

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Cash and Receivables
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Recap Example 1 Jandro Company manufactures pink footballs. On July 15, 2009, the company sold 1,000 pink footballs to the Hyde State Football team for $50 each. The terms of the sale were 2/10, n/30. Assume Jandro uses the gross (or net) method of accounting for cash discounts.
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1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods sold) and payment on July 23, 2009
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2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods sold) and payment on August 15, 2009
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3. Prepare the journal entries to record the sale on July 15 (ignore cost of goods sold) and payment on July 23, 2009 (Net Method)
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4. Prepare the journal entries to record the sale on July 15 (ignore cost of goods sold) and payment on Aug 15, 2009 (Net Method)
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Recap Example 2 Langanke Cycle Path Ltd. sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at Dec 31, the company’s fiscal year-end. The 2008 balance sheet disclosed the following: Current assets: Receivables, net of allowance $432,000 for uncollectible accounts of $30,000 (cont)
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Recap Example 2 (cont.) During 2009, credit sales were $1,750,000, cash collections from customers $1,830,000 and $35,000 in A/R were written off. In addition, $3,000 was collected from a customer whose account was written off in 2008. An aging of receivable at December 31, 2009, reveals the following % of year-end Age Group receivables in group % uncollectible 0-60 days 65% 4% 61-90 20 15 91-120 10 25 Over 120 5 40
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Prepare summary journal entries to account for the 2009 write-offs and the collection of the receivables previously written off
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Prepare year-end adjusting entry for bad debts where bad debt expense is estimated to be 3% of credit sales for the year Allowance 30,000 35,000 3,000 2,000 52,500 50,500
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Prepare year-end adjusting entry for bad debts where the allowance for uncollectible accounts is estimated to be 10% of the year-end balance in A/R Accounts Receivable 462,000 1,750,000 1,830,000 35,000 347,000
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Prepare year-end adjusting entry for bad debts where the allowance for uncollectible accounts is determined by an aging of A/R
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Prepare year-end adjusting entry for bad debts where the allowance for uncollectible accounts is determined by an aging of A/R
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For the previous 3 situations, what would be the net amount of A/R reported in the 2009 balance sheet (A) (B) (C) $347,000 $347,000 $347,000 ($50,500) (34,700) (35,047) $296,500 $312,300 $311,953
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Notes Receivable A written promise to pay a specific amount at a specific future date. Face amount of the note × Annual interest rate × Fraction of the annual period = Interest Even for maturities less than 1 year, the rate is annualized.
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Interest-Bearing Notes On November 1, 2008, Thompson, Inc. loans $25,000 to Dias, Co. The note bears interest at 12% and is due on November 1, 2009. Prepare the journal entry on November 1, 2008, December 31, 2008, (year-end) and November 1, 2009 for Thompson. GENERAL JOURNAL Page 56 Date Description Post.
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This note was uploaded on 07/08/2011 for the course ACG 3482C taught by Professor Tinaker during the Fall '09 term at University of Florida.

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SSNT7_Cash2 - Cash and Receivables Recap Example 1 Jandro...

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