Instructions prepare journal entries to record the

This preview shows 29 out of 31 pages.

Instructions Prepare journal entries to record the 2010 transactions of Braddock Company. E9-6 On December 31, 2010, Jarnigan Co. estimated that 2% of its net sales of $400,000 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May 11, 2011, Jarnigan Co. determined that Terry Frye’s account was un- collectible and wrote off $1,100. On June 12, 2011, Frye paid the amount previously written off. Instructions Prepare the journal entries on December 31, 2010, May 11, 2011, and June 12, 2011. E9-7 Presented below are two independent situations. (a) On March 3, Cornwell Appliances sells $680,000 of its receivables to Marsh Factors Inc. Marsh Factors assesses a finance charge of 3% of the amount of receivables sold. Prepare the entry on Cornwell Appliances’ books to record the sale of the receivables. (b) On May 10, Dale Company sold merchandise for $3,500 and accepted the customer’s America Bank MasterCard.America Bank charges a 4% service charge for credit card sales. Prepare the entry on Dale Company’s books to record the sale of merchandise. E9-8 Presented below are two independent situations. (a) On April 2, Nancy Hansel uses her J. C. Penney Company credit card to purchase merchandise from a J. C. Penney store for $1,500. On May 1, Hansel is billed for the $1,500 amount due. Hansel pays $700 on the balance due on May 3. On June 1, Hansel receives a bill for the amount due, including interest at 1.0% per month on the unpaid balance as of May 3. Prepare the entries on J. C. Penney Co.’s books related to the transactions that occurred on April 2, May 3, and June 1. (b) On July 4, Kimble’s Restaurant accepts a Visa card for a $200 dinner bill. Visa charges a 3% service fee. Prepare the entry on Kimble’s books related to this transaction. E9-9 Topeka Stores accepts both its own and national credit cards. During the year the fol- lowing selected summary transactions occurred. Jan. 15 Made Topeka credit card sales totaling $18,000.(There were no balances prior to January 15.) 20 Made Visa credit card sales (service charge fee 2%) totaling $4,300. Feb. 10 Collected $10,000 on Topeka credit card sales. 15 Added finance charges of 1% to Topeka credit card balance. Journalize credit card sales, and indicate the statement presenta- tion of financing charges and service charge expense. (SO 4) Determine bad debts expense; prepare the adjusting entry for bad debts expense. (SO 3) PDF Watermark Remover DEMO : Purchase from to remove the watermark
Image of page 29

Subscribe to view the full document.

Instructions (a) Journalize the transactions for Topeka Stores. (b) Indicate the statement presentation of the financing charges and the credit card service charge expense for Topeka Stores. E9-10 Orosco Supply Co. has the following transactions related to notes receivable during the last 2 months of 2010. Nov. 1 Loaned $15,000 cash to Sally Givens on a 1-year, 10% note.
Image of page 30
Image of page 31
You've reached the end of this preview.

{[ 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