ACCT
Homework Problems

Sales 40 e7 7 a bad debt expense 800000 50000 x 1

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• DeaconIceParrot9873
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Sales 40 E7-7 A) Bad debt expense (800,000-50,000 x 1%) 7,500           Allowance for doubtful accounts 7,500 B) Bad debt expense (160,000 x 5% - 2,000) 6,000           Allowance for doubtful accounts 6,000 E7-12 7/1 A/R - Legler Co 9,800           Sales (10,000*.98) 9,800 7/5 Cash (12,000 x .91) 10,920 Loss on sale of receivables 1,080           A/R (12,000 x .98) 11,760           Sales discounts forfeited 240 7/9 A/R (9,000 x 2%) 180           Sales discounts forfeited 180 Cash 5,640 Finance charge (6,000 x 6%) 360           Notes payable 6,000 7-11 A/R - Legler Co 200           Sales discount forfeited (10,000*.02) 200 12/29 Allowance for doubtful accounts 9,000

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A/E - Legler Co. (10,000 x .90) 9,000 E7-24 Balance per Bank 8,650 Add: Deposits in transit 2,850 Less: Outstanding checks -1,100 Adjusted bank balance 10,400 Balance per book 9,250 Add: Note collected 1,500 1,500 Less: Service fee 15            NSF check returned 335 (350) 10,400 B) Cash 1,500           Notes payable 1,500 Other expenses - bank fee 15           Cash 15 A/R 335           Cash 335 P7-2 1) 1,200,000 x .015 = 18,000 2) 1,750,000-180,000 = 1,570,000 3) 2,400,000 x .03 = 72,000 Allowance for doubtful accounts 1/1/10 17,000 Collection of precious write off 8,000 Write offs -30,000 Dobtful account 2010 72,000 67,000 4) Bad debt 84,000 Write offs -24,000 Allowance for doubtful accounts 60,000 A/R net of allowance for doubtful accounts 950,000 Allowance for doubtful accounts 60,000 Total A/R 1,010,000
5) 310,000 x 3% = 9,300 Bad debt exp 9,300 Allowance for doubtful accounts 14,000 Adjusted bad debt exp 23,300 P7-4 A) Balance 1/1/10 130,000 Provision for doubtful accounts (9,000,000 x 2%) 180,000 Recovery of previous write offs 2010 15,000 325,000 Less: write-offs for 2010(90,000+60,000) -150,000 Balance at 12/31/10 before change in estimate 175,000 Increase due to change in estimatie in 2010 88,600 Balance as of 12/31/10 263,600 Nov-Dec 2010 1,080,000 2% 21,600 July-Oct 650,000 10% 65,000 Jan-June 420,000 25% 105,000 Prioir to 1/1/10 90,000 80% 72,000 263,600 B) Bad debt expense 88,600           Allowance for doubtful accounts 88,600 P7-7 7-1 Cash 119,400 Finance charge (120,000 x .005) 600           Note payable  (150,000 x 80%) 120,000 7-31 Note payable 80,000           A/R 80,000 Finance Charge (70,000 x .005) 350           Finance charge Payable 350 8-31 Note payable 40,000 Cash 9,550 Finance charge payable 350 Finance Charge (20,000 x .005) 100           A/R 50,000

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E8-3 1) This should still be listed as inventory because it has not shipped. 2) This would not be listed as inventory until January 3 when it is received with the invoice. 3) This should be included in the inventory because it was not shipped until January. 4) This is not included because goods are owned by the consignor.
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• Spring '10
• George
• Accounting, Net Income, Doubtful Accounts, total

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