{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter_7_Cash_And_Receivables_Extra_Class_Problems_And_Solutions

Chapter_7_Cash_And_Receivables_Extra_Class_Problems_And_Solutions

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

View Full Document Right Arrow Icon
Intermediate Accounting I Class Problems Chapter 7 1. Sales Discounts Saturn Company made sales of $25,000 with terms of 1/10, n/30. Within the discount period it received payment from customers owing $15,000; after the discount period it received payment from customers owing $10,000. a. Prepare journal entries for the transactions described above assuming Saturn uses the gross method of recording sales. b. Prepare journal entries for the transactions described above assuming Saturn uses the net method of recording sales. 2. Sales Discounts The Lambert Corporation sells merchandise at a list price of $60,000 with accompanying terms 2/10, n/30 on December 8, 2005. By December 18, 2005, Lambert had collected from customers for merchandise originally billed at $34,000. By December 31, 2005 (Lambert’s FYE), additional collections had been received on sales originally billed at $18,000 and sales returns and allowances of $1,500 had been granted by Lambert. By January 15, 2006, all remaining balances due had been collected. Assume a 12/31 fiscal year end. Required: a. Prepare the journal entries using (a) the gross method and (b) the net method to record all the items above. b. Calculate the accounts receivable balance that would be reported under the (a) gross method and (b) net method on the Lambert Corp.’s December 31, 2005 balance sheet. 3. Accounts Receivable and Bad Debt Expense Tiger Tank, Inc. had net sales in 2005 of $1,200,000. At year-end, the balance in Accounts Receivable was $250,000 (debit balance), and the balance in the Allowance for Doubtful Accounts is $2,100 (credit balance). Calculate bad debt expense and record the journal entry necessary under each of the following scenarios: a) Tiger Tank estimates that 2% of net sales are uncollectible b) Tiger Tank estimates that 10% of accounts receivable are uncollectible c) Based on an accounts receivable aging schedule, Tiger Tank estimates that total uncollectible accounts receivable are $24,600.
Image of page 1

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

View Full Document Right Arrow Icon
4. Accounts Receivable and Bad Debt Expense An examination of the accounting records of Keegan Corp. disclosed the following information
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern