BE7-1

Cash in banksavings account

67,880

Checking account balance

Cash on hand

8,670

Postdated checks

Cash refund due from IRS

40,120

Certificates of deposit (180-day)

Answer to Questions

Cash in banksavings account ...................................

$67,880
Cash on hand ..............................................................
8,670
Checking account balance............................................
24,390
Cash to be reported.....................................................
$100,940

BE7-3

Relates to 7-2 (Uses net method to account for cash)

1-Jun Accounts Receivable ..............................61838

Sales.....................................................
12-Jun Cash........................................................
Accounts Receivable......................

61,838
61,838
61,838

BE7-5

Use 7-4 for Wilton Inc C

A. Uncollectible of net sales
B. Uncollectible of net sales
Aging Schedule with uncollectibl

0.1
29900

Answer to Questions

(a)

(b)

Bad Debt Expense .

Allowance for Doubtful Accounts

21,950

Bad Debt Expense

Allowance for Doubtful Accounts

26,030

21,950

26,030

BE7-7
Dold Acrobats
Lent
16529
Accepting two years
20000
Interest zero bearing
Implied interest rate
0.1
Collection of maturity
20000

Answer to Questions

Notes Receivable .......................................

16,529
Cash ..........................................................................
Notes Receivable .......................................
1,653

16,529

Interest Revenue
$16,529 X 10% ....................................................

1,653

Notes Receivable .......................................

1,818
Interest Revenue
($16,529 + $1,653) X 10% ................................
Cash..........

1,818

20,000

Notes Receivable..................................................

BE7-9

20,000

Wood Incorporated
Accounts Receivables
150,000.00
Finance charge
0.02
Retained to Account Receivables
0.06

Answer to Questions
Wood
Cash...........................................................................138,000
Due from Factor..........................................................9000
Loss on Sale of Receivables ......................................3000
Accounts Receivable ..........................................
*6% X $150,000 = $9,000
**2% X $150,000 = $3,000
Engram
Accounts Receivable ..................................................
Due to Wood...........................................................
Financing Revenue ..............................................
Cash ..........................................................................

150,000

150,000
9,000
3,000
138,000

BE7-2
Restin Co. 2014

hecking account balance

24,390

ostdated checks

810

ertificates of deposit (180-day)

92,350

Sales
percent
Discount days
Total day

Answer to Questions

1-Jun Accounts Receivable ............

Sales.....................................

12-Jun Cash
Sales Discounts.

Accounts Receivable.............

BE7-4
Wilton Inc Dec. 31 2014
Net Sales

Before Adjusting entries o

Accounts Receivables
Allowance for Doubful Acc
Uncollectible of net sales

Answer to Questi

Bad Debt Expense................

Allowance

BE7-6

Tung Decorators Novembe

Milner sold goods for
Accepts
months
Percent

Answer to Questi

11/1/2010
12/31/2010

5/1/2011

BE7-8
Chung Inc. October 2014

Assigns Account Receivab

Collateral Note
Bank finance charge
interest on the note

Answer to Questi
Chung, Inc.

Cash .........................................
Finance Charge (1,000,000 X 2
Notes Payable ..........................

Seneca National Bank

Notes Receivable.......................
Cash .........................................
Financing Revenue (1,000,000

n Co. 2014
63100
2%
15
45

to Questions

unts Receivable ...............................63,100

.....................................................

63,100

61838
1,262

Discounts.

unts Receivable......................

63,100

n Inc Dec. 31 2014

1431800

e Adjusting entries of balance sheet

unts Receivables
ance for Doubful Accounts
llectible of net sales

258200
3870
0.02

Answer to Questions

Debt Expense.............................................................
28,636
Allowance for Doubtful Accounts
(1,400,000 X 2%).................................................

###

Decorators November 2014

r sold goods for

30,000.00
30,000.00
6.00
6%

Answer to Questions

Notes Receivable...........................................
Sales .......................................................
Interest Receivable .......................................
Interest Revenue
($30,000 X 6% X 2/12).....................
Cash................................................................... Notes Receiv
Interest Receivable ............................
Interest Revenue
($30,000 X 6% X 4/12)......................

g Inc. October 2014

ns Account Receivable
teral Note
finance charge
est on the note

1,000,000.00
750,000.00
0.02
0.09

Answer to Questions

...............................................................730,000
e Charge (1,000,000 X 2%) ..................
20,000
Payable ........................................................

750,000

30,000
30,000
300
300
30,900
30,000
300
600

a National Bank

Receivable.............................................................
.........................................................................
ing Revenue (1,000,000 X 2%)...........

750,000
730,000
20,000