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Chap009 Solution Manual(1)

Dec 1 allowance for doubtful accounts 2414 accounts

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Dec. 1 Allowance for Doubtful Accounts .................. 2,414 Accounts Receivable—J. Halaam ............ 2,414 To record write-off of account. Part 2 Analysis Component : When a business pledges its receivables as security for a loan and the loan is still outstanding at period-end, the business must disclose this information in notes to its financial statements. This is a requirement because the business has committed a portion of its assets to cover a specific portion of its liabilities, which means that if the business dishonors its obligations under the loan, the creditor can claim the amount of receivables identified in the pledge as collateral to cover the loan. This arrangement must be disclosed to satisfy the full-disclosure principle. 9-23
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Chapter 09 - Accounting for Receivables PROBLEM SET B Problem 9-1B (30 minutes) Aug. 4 Accounts Receivable—Stacy Dalton ..................... 2,780 Sales ................................................................... 2,780 To record sales on credit. Cost of Goods Sold .................................................... 1,750 Merchandise Inventory ......................................... 1,750 To record cost of sales. 10 Cash .......................................................................... 3,151 Credit Card Expense* (rounded to nearest dollar) ........................................................................ 97 Sales ................................................................... 3,248 To record credit card sales less fee. *($3,248 x .03) Cost of Goods Sold .................................................... 2,456 Merchandise Inventory ......................................... 2,456 To record cost of sales. 11 Accounts Receivable—Aztec .................................. 1,543 Credit card expense* (rounded to nearest dollar) .. 32 Sales ................................................................... 1,575 To record credit card sales less fee. *($1,575 x .02) Cost of Goods Sold .................................................... 1,150 Merchandise Inventory ......................................... 1,150 To record cost of sales. 14 Cash ............................................................................ 2,724 Sales Discounts* (rounded to nearest dollar) .............. 56 Accounts Receivable—Stacy Dalton ................... 2,780 To record cash received less discount. *($2,780 x .02) 15 Accounts Receivable—Aztec ..................................... 2,901 Credit Card Expense* (rounded to nearest dollar) ........ 59 Sales ....................................................................... 2,960 To record credit card sales less fee. *($2,960 x .02) Cost of Goods Sold .................................................... 1,758 Merchandise Inventory ......................................... 1,758 To record cost of sales. 18 No journal entry required. 9-24
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Chapter 09 - Accounting for Receivables 22 Allowance for Doubtful Accounts ............................. 398 Accounts Receivable—Ness City ........................ 398 To write off account due. 25 Cash ............................................................................ 4,444 Accounts Receivable—Aztec ............................... 4,444 To record cash received from credit card co. 9-25
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Chapter 09 - Accounting for Receivables Problem 9-2B (35 minutes) 2010 a. Accounts Receivable ..................................... 673,490 Sales ......................................................... 673,490 To record sales on account. Cost of Goods Sold ....................................... 500,000 Merchandise Inventory ............................ 500,000 To record cost of sales. b. Cash ............................................................... 437,250 Accounts Receivable ............................... 437,250 To record cash received on account. c. Allowance for Doubtful Accounts ................. 8,330 Accounts Receivable ............................... 8,330 To record write-off of accounts. d. Bad Debts Expense ....................................... 10,609 Allowance for Doubtful Accounts ........... 10,609 To record estimated bad debts. * *Beginning receivables .................... $ 0 Credit sales ...................................... 673,490 Collections ....................................... (437,250) Write-offs .......................................... (8,330 ) Ending receivables .......................... 227,910 Percent uncollectible ...................... x 1.0% Required ending allowance ............ 2,279** Cr. Unadjusted balance ......................... 8,330 Dr. Adjustment to the allowance ......... $ 10,609 Cr. ** Rounded to nearest dollar 9-26
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Chapter 09 - Accounting for Receivables Problem 9-2B (Concluded) 2011 e. Accounts Receivable ..................................... 930,100 Sales ......................................................... 930,100 To record sales on account. Cost of Goods Sold ....................................... 650,000 Merchandise Inventory ............................ 650,000 To record cost of sales.
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