I have read the chapter several times and I am not sure on how I am supposed to respond to the questions. Thanks for the help!
Presented below are two independent situations.
1. On January 6, Arneson Co. sells merchandise on account to Cortez Inc. for $9,000, terms 2/10, n/30. On January 16, Cortez Inc. pays the amount due. Prepare the entries on Arneson's books to record the sale and related collection.
2. On January 10, Mary Dawes uses her Pierson Co. credit card to purchase merchandise from Pierson Co. for $9,000. On February 10, Dawes is billed for the amount due of $9,000. On February 12, Dawes pays $5,000 on the balance due. On March 10, Dawes is billed for the amount due, including interest at 2% per month on the unpaid balance as of February 12. Prepare the entries on Pierson Co.'s books related to the transactions that occurred on January 10, February 12, and March 10.
Journalize entries for recognizing accounts receivable.
On January 1, 2011, Kloppenberg Company had Accounts Receivable $139,000, Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Sara Rogers Company. It is a 4-month, 12% note dated December 31, 2010. Kloppenberg Company prepares financial statements annually. During the year the following selected transactions occurred.
Jan. 5 Sold $20,000 of merchandise to Dedonder Company, terms n/15.
20 Accepted Dedonder Company's $20,000, 3-month, 9% note for balance due.
Feb. 18 Sold $8,000 of merchandise to Ludwig Company and accepted Ludwig's $8,000, 6-month, 9% note for the amount due.
Apr. 20 Collected Dedonder Company note in full.
30 Received payment in full from Sara Rogers Company on the amount due.
May 25 Accepted Jenks Inc.'s $4,000, 3-month, 7% note in settlement of a past-due balance on account.
Aug. 18 Received payment in full from Ludwig Company on note due.
25 The Jenks Inc. note was dishonored. Jenks Inc. is not bankrupt; future payment is anticipated.
Sept. 1 Sold $12,000 of merchandise to Lena Torme Company and accepted a $12,000, 6-month, 10% note for the amount due.
Prepare entries for various receivable transactions.
Journalize the transactions.
At December 31, 2010, dill imports reported the following information on its balance sheet.
Accounts receivable 250, 000
During 2011, the company had the following transactions related to receivables.
1. sales on account 2,400,000
2. sales and returns and allowances 45,000
3. collections of accounts receivables 2,250,000
4. write offs of accounts receivable deemed uncollectible 12,000
5. recovery of bad debts previously written off as collectible 3,000
prepare journal entries related to bad debts expense
1. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.
Enter the January 1, 2011, balances in Accounts Receivable and Allowance for Doubtful Accounts. Post the entries to the two accounts (use T accounts), and determine the balances.
b) Accounts receivable $343,000
Prepare the journal entry to record bad debts expense for 2011, assuming that an aging of accounts receivable indicates that estimated bad debts are $22,000.
(c) Bad debts expense $16,000
Compute the accounts receivable turnover ratio for the year 2011.