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Classroom Practice -- Chapters 7 and 8 3

Classroom Practice -- Chapters 7 and 8 3 - 1 Classroom...

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1 Classroom practice for Chapters 7 and 8 (source: COMM 217 midterm exam, October 2009) Question "1" (18 marks; 32 minutes) Accounting for receivables At September 1, 2009, Marjolaine, Inc. reported the following information on its balance sheet: Accounts receivable $49,000 Allowance for doubtful accounts 3,430 During September, the following selected transactions occurred for Marjolaine, Inc. September 2 Sold 10 identical merchandise items for $12,000 Cash. These items had a cost of $7,800. September 4 Two items sold on September 2 were returned. The customer was given a cash refund and the items were returned to the inventory. September 10 Performed services on account (credit terms 2/10, n/30) for A. Clement and B. Kwan for $3,500 and $2,500, respectively. September 16 Collected $23,000 cash from customers for sales made in previous months. September 18 Received the correct payment from B. Kwan. The amount due from A. Clement remained unpaid at September 30. September 23 C. Skaker who owes the Company $960 was forced to close her business in September. Marjolaine, Inc. decided to write this amount off as uncollectible.
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