Question

Expense, $11,287 Year 2 e. Sold $870,220 of merchandise f. Received $990,800 cash in payment of accounts g. Wrote off S11,090 of uncollectible accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1% of : accounts a Dr. Bad Debts Expense, $9,773 would be uncollectible. Prepare journal entries to record Sherman's summarized transactions and its year-end adjusoe The General Led financial professi mance measures. Required record bad debts expense. (The company uses the perpetual inventory system, and it applies toe l method for its accounts receivable.) GL 9-1 Gener Problem 9-5B The following transactions are from Springer Company. accounts and no Bujzijeuunof pue bujzkjeuy Year 1 Nov. 1 Accepted a $4,800, 90-day, 8% note in granting Steve Julian a time extension on tis p notes receivable transactions C2 C3 P4 account receivable. Dec. 31 Made an adjusting entry to record the accrued interest on the Julian note Accounti Year 2 Jan. 30 Received Julian's payment for principal and interest on the note dated Novemba Feb. 28 Accepted a $12,600, 30-day, 8% note in granting a time extension on the Check Jan, 30, Cr. Interest Revenue, $32 AA 9-1 Use 1. What is tH receivable from King Co. 2. Compute Mar. 1 Accepted a $6,200, 60-day, 12% note in granting Myron Shelley a time exteni past-due account receivable. 30 The King Co. dishonored its note. Apr. 30 Received payment of principal plus interest from M. Shelley for the March I note June 15 Accepted a $2,000, 72-day, 8% note in granting a time extension on the past.ds 3. How long Septemb- 4. Apple's (c) acco make ug Apr. 30, Cr. Interest Revenue, $124 receivable of Ryder Solon. 21 Accepted a $9,500, 90-day, 8% note in granting J. Felton a time extension on his pu ount receivable. 5. Did Ap- year-en account Aug. 26 Received payment of principal plus interest from R. Solon for the June 15 note. Sep. 19 Received payment of principal plus interest from J. Felton for the June 21 note. Nov. 30 Wrote off King's account against the Allowance for Doubtful Accounts. Sep. 19, Cr. Interest Revenue, 0615 Required AA 9-2 C 1. Prepare journal entries to record these transactions and events. Analysis Component 2. If Springer pledged its receivables as security for a loan from the bank, where on the tinaka ments does it disclose this pledge of receivables? $ milli noɔɔy SERIAL PROBLEM Net sa This serial problem began in Chapter 1 and continues through most of the book. Ij previba n ments were not completed, the serial problem can begin at this point. Business Solutions Requir P1 P2 1. Co SP 9 Santana Rey, owner of Business Solutions, realizes that she needs to begin debts expense. Assume that Business Solutions has total revenues of $44,000 during the first three of 2020 and that the Accounts Receivable balance on March 31. 2000 ir f1 O 2. Co D) 3. W

Problem 9-5B

Answer 1

Qdution : Journal Entries in the books of Springer company, Date Account Names Debits ($) Credits ($) Yearl 4,800 Notes Recievable Al NOV 1 4,800 Accounts Recievable or Stere Julian ( Being Promissory note of $4800 accepted against account recevable) Dec 31 64 64 Interest Recievable Account Interest Revenue (Being interest accrued for the period of 2 months) [Refer working note ] Year a 4,896 Jan 30 Cash Notes Recevable Interest Recievable Account Interest Revenue ( Being payment neueved from Steve Julians for the note along with interst) [Refer working noe ] Feb 28 12, 600 Notes Recievable King Company (Bring praninary nde of $12,600 accepted against account recievable) 12,600

Date Account Names March I Debits ($) Credits (4) 6,200 6,200 Notes Recevable Myron Shelley ( Being promissory note of $6,200 recieval against accounts recievable) March 30 12,684 12,600 King Company Notes Recievable Interest Revenue (Being dishonouring of promimory note by King company hence reversal of the initial entry) [ Refer working note 2] April 30 6,324 6,200 Cash Notes Deewable Friterest Revenue (Being payment recieved from M. Shelley for Marchi note) [ Refer working note 3] 124 June 15 2,000 2,000 Notes Recevable Ryder Solon (Being promimory note of $2,000 recieved against acourt rennable) 9,500 June al 9,500 I Notes Recienable J. Felton ( Being promisory note of $9,500 recieved against accounts recevable.)

Debits (4) Credits & Date Account Names 2,032 Aug 26 2,000 Cash Notes Relevable Interest Revenue (Being payment recieved from R. solons for June 15th note) [Refer working note 4] 9,6990 Sep 19 Cash Notes 9,500 Recievable 190 Interest Revenue (Being payment recieved from J. Telten for June 21 note) [Refer working note Nov 30 12,684 12,684 Allowance for doubtful debts King Company (Being king company's auant transferred to doubtful debts .) Notes: (i) It has been for interest assumed that calculation there are 360 days in the year

W orking note I i Steve Julian ] Dec 31 For the purpose of calculation the formula is principle x rate x timme Interest aurued on Dec 31 (1st year) Note accepted on Novi : Time period = 60 days (Novi-Boered) Interest = $4800 x 8% * 60 = $64 360 Balance interst shown at the time of t for a month (Jani - Jan 3o) . Interest - $4800 * 8% 30 - $32 360 Interest awreed is the amount which is due to us by Julian but not yet recieved, hence we record it as recievable and subsequently reverse it on receipt of actual payment. Working note a : [king Company] Interest - principle x rate & time. = $ 12,600 x 87 x 30 360 - $ 84 Since , King company dishonoured the note his recievable balance is now increased by the interest portion of $84. King company's Al i transferred to doustful debb on Nov 3o.

Working note 3: [M. Shelley] Interest - $6200 * 12% x 60 360 = $ 124 Working note 21 = [R. Solom] Interest = $2000 x 8 % x 72 360 Working note 5 : [ J. Felton] Interest - $9500 x 8% x 90 a $190 360