Summary ACCT 211 Connect Homework Chapter 7 Problems Liberty University answers complete solutions You'll get 2 XLSX 2022/2023

ACCT 211 Connect Homework Chapter 7 Problems Liberty University answers complete solutions You'll get 2 XLSX [The following information applies to the questions displayed below.] Vail Company recorded the following selected transactions during November 2015. Date General Journal Debit Credit Nov. 5 Accounts Receivable—Ski Shop 4,328 Sales 4,328 10 Accounts Receivable—Welcome Enterprises 2,416 Sales 2,416 13 Accounts Receivable—Zia Natara 1,417 Sales 1,417 21 Sales Returns and Allowances 366 Accounts Receivable—Zia Natara 366 30 Accounts Receivable—Ski Shop 5,037 Sales 5,037 ________________________________________ 1. Prepare a general ledger having T-accounts for Accounts Receivable, Sales, and Sales Returns and Allowances. Post these entries to both the general ledger and the accounts receivable ledger. General Ledger Accounts Receivable Nov. 5 4,328 366 Nov. 21 Nov. 10 2,416 Nov. 13 1,417 Nov. 30 5,037 End.Bal 12,832 Sales 4,328 Nov. 5 2,416 Nov. 10 1,417 Nov. 13 5,037 Nov. 30 End.Bal 13,198 Sales Returns and Allowances Nov. 21 366 End.Bal 366 Accounts Receivable Subsidiary Ledger Ski Shop Nov. 5 4,328 Nov. 30 5,037 End.Bal 9,365 Welcome Enterprises Nov. 10 2,416 End.Bal 2,416 Zia Natara Nov. 13 1,417 366 Nov. 21 End.Bal 1,051 2. Prepare a schedule of accounts receivable. VAIL COMPANY Schedule of Accounts Receivable November 30, 2015 Ski Shop $9,365 Welcome Enterprises 2,416 Zia Natara 1,051 Total $12,832 Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine accepts is the Continental Card. Levine sends its accumulated receipts to Continental on a weekly basis and is paid by Continental about a week later. Continental assesses a 2.5% charge on sales for using its card. Apr. 8 Sold merchandise for $9,700 (that had cost $7,168) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account. 12 Sold merchandise for $9,900 (that had cost $6,415) and accepted the customer's Continental Card. Transferred $9,900 of credit card receipts to Continental, requesting payment. 20 Received Continental's check for the April 12 billing, less the service charge. Prepare journal entries to record the above selected credit card transactions of Levine Company. Date General Journal Debit Credit Apr 08 Cash 9,312 Credit card expense 388 Sales 9,700 Apr 08 Cost of goods sold 7,168 Merchandise inventory 7,168 Apr 12 Accounts receivable—Continental 9,652 Credit card expense 248 Sales 9,900 Apr 12 Cost of goods sold 6,415 Merchandise inventory 6,415 Apr 20 Cash 9,652 Accounts receivable—Continental 9,652 Explanation: Apr 8 Credit card expense = $9,700 × 0.04 = $388 Apr 12 Credit card expense = $9,900 × 0.025 = $248 Dexter Company applies the direct write-off method in accounting for uncollectible accounts. March 11 Dexter determines that it cannot collect $9,700 of its accounts receivable from its customer Lester Company. 29 Lester Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above selected transactions of Dexter. Date General Journal Debit Credit March 11 Bad debts expense 9,700 Accounts receivable—Lester Co. 9,700 March 29 Accounts receivable—Lester Co. 9,700 Bad debts expense 9,700 March 29 Cash 9,700 Accounts receivable—Lester Co. 9,700 At year-end (December 31), Chan Company estimates its bad debts as 0.80% of its annual credit sales of $806,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $403 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare the journal entries for these transactions. Date General Journal Debit Credit Dec 31 Bad debts expense 6,448 Allowance for doubtful accounts 6,448 Feb 01 Allowance for doubtful accounts 403 Accounts receivable—P. Park 403 Jun 05 Accounts receivable—P. Park 403 Allowance for doubtful accounts 403 Jun 05 Cash 403 Accounts receivable—P. Park 403 Explanation: Dec 31 To record estimated bad debts expense (0.008 × $806,000) = $6,448 At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2015, it has outstanding accounts receivable of $82,500, and it estimates that 5% will be uncollectible. Prepare the adjusting entry to record bad debts expense for year 2015 under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,403 credit balance before the adjustment. (b) a $413 debit balance before the adjustment. Transaction General Journal Debit Credit (a) Bad debts expense 2,722 Allowance for doubtful accounts 2,722 (b) Bad debts expense 4,538 Allowance for doubtful accounts 4,538 Explanation: (a) Unadjusted balance $ 1,403 credit Estimated balance ($82,500 × 0.05) 4,125 credit ________________________________________ ________________________________________ Required adjustment $ 2,722 credit ________________________________________________________________________________ ________________________________________________________________________________ (b) Unadjusted balance $ 413 debit Estimated balance ($82,500 × 0.05) 4,125 credit ________________________________________ ________________________________________ Required adjustment $ 4,538 credit ________________________________________________________________________________ ________________________________________________________________________________ Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis Days Past Due ________________________________________ Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 670,000 $ 416,000 $ 110,000 $ 56,000 $ 38,000 $ 50,000 Percent uncollectible 3 % 4 % 7 % 9 % 12 % a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method. Accounts Receivable Percent Uncollectible (%) Not due: $416,000 x 3 % = $12,480 1 to 30: 110,000 x 4 % = 4,400 31 to 60: 56,000 x 7 % = 3,920 61 to 90: 38,000 x 9 % = 3,420 Over 90: 50,000 x 12 % = 6,000 Estimated balance of allowance for uncollectibles $30,220 credit b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $5,600 credit and $2,100 debit. Date General Journal Debit Credit Dec 31 Bad debts expense 24,620 Allowance for doubtful accounts 24,620 Dec 31 Bad debts expense 32,320 Allowance for doubtful accounts 32,320 Explanation:b. Unadjusted balance $ 5,600 credit Estimated balance 30,220 credit ________________________________________ ________________________________________ Required adjustment $ 24,620 credit ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Unadjusted balance $ 2,100 debit Estimated balance 30,220 credit ________________________________________ ________________________________________ Required adjustment $ 32,320 credit ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Chapter 7 Problems Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 2.5% service charge for sales on its credit card and credits the bank account of Mayfair immediately when credit card receipts are deposited. Mayfair deposits the Zisa credit card receipts each business day. When customers use Access credit cards, Mayfair accumulates the receipts for several days before submitting them to Access for payment. Access deducts a 1.5% service charge and usually pays within one week of being billed. Mayfair completes the following transactions in June. (The terms of all credit sales are 2/15, n/30, and all sales are recorded at the gross price.) June 4 Sold $500 of merchandise (that had cost $250) on credit to Natara Morris. 5 Sold $6,300 of merchandise (that had cost $3,150) to customers who used their Zisa cards. 6 Sold $5,794 of merchandise (that had cost $2,897) to customers who used their Access cards. 8 Sold $4,640 of merchandise (that had cost $2,320) to customers who used their Access cards. 10 Submitted Access card receipts accumulated since June 6 to the credit card company for payment. 13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $721 balance in McKee’s account stemmed from a credit sale in October of last year. 17 Received the amount due from Access. 18 Received Morris’s check in full payment for the purchase of June 4. Required: Prepare journal entries to record the preceding transactions and events. (The company uses the perpetual inventory system.) (Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Date General Journal Debit Credit June 04 Accounts receivable—N. Morris 500 Sales 500 June 04 Cost of goods sold 250 Merchandise inventory 250 June 05 Cash /-16,142 Credit card expense /-1158 Sales 6,300 June 05 Cost of goods sold 3,150 Merchandise inventory 3,150 June 06 Accounts receivable—Access /-15,707 Credit card expense /-187 Sales 5,794 June 06 Cost of goods sold 2,897 Merchandise inventory 2,897 June 08 Accounts receivable—Access /-14,570 Credit card expense /-170 Sales 4,640 June 08 Cost of goods sold 2,320 Merchandise inventory 2,320 June 10 No journal entry required June 13 Allowance for doubtful accounts 721 Accounts receivable—A. McKee 721 June 17 Cash /-210,277 Accounts receivable—Access /-210,277 June 18 Cash /-1492 Sales discounts /-18 Accounts receivable—N. Morris 500 Explanation: June 5 To record credit card sales less fee. ($6,300 × 0.025) = $158 6 To record credit card sales less fee. ($5,794 × 0.015) = $87 8 To record credit card sales less fee. ($4,640 × 0.015) = $70 18 To record cash received less discount. ($500 × 0.015) = $8 [The following information applies to the questions displayed below.] At December 31, 2015, Hawke Company reports the following results for its calendar year. Cash sales $ 1,718,960 Credit sales 3,389,000 ________________________________________ In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,026,867 debit Allowance for doubtful accounts 23,510 debit ________________________________________ Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions. a. Bad debts are estimated to be 4% of credit sales. b. Bad debts are estimated to be 3% of total sales. c. An aging analysis estimates that 7% of year-end accounts receivable are uncollectible. Adjusting entries (all dated December 31, 2015). (Round your final answers to the nearest whole dollar.) Transaction General Journal Debit Credit a. Bad debts expense 135,560 Allowance for doubtful accounts 135,560 b. Bad debts expense 153,239 Allowance for doubtful accounts 153,239 c. Bad debts expense 95,391 Allowance for doubtful accounts 95,391 Explanation: Dec 31, 2015 a. Expense is 4% of credit sales: To record estimated bad debts [$3,389,000 × 0.04] = $135,560 b. Expense is 3% of total sales: To record estimated bad debts [($1,718,960 $3,389,000) × 0.03] = $153,239 c. Allowance is 7% of accounts receivable: Unadjusted balance $ 23,510 debit Estimated balance ($1,026,867 × 7%) 71,881 credit ________________________________________ ________________________________________ Required adjustment $ 95,391 credit ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015, balance sheet given the facts in part 1a. Current assets: Accounts receivable $1,026,867 Less: Allowance for doubtful accounts (112,050) $914,817 Explanation: Dec 31 a. Expense is 4% of credit sales: To record estimated bad debts [$3,389,000 × 0.04] = $135,560 Adjustment to the allowance $ 135,560 Credit Unadjusted allowance balance 23,510 Debit ________________________________________ ________________________________________ Adjusted balance $ 112,050 Credit ________________________________________________________________________________ ________________________________________________________________________________ 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015, balance sheet given the facts in part 1c. (Round your intermediate and final answers to the nearest whole dollar.) Current assets: Accounts receivable $1,026,867 Less: Allowance for doubtful accounts (71,881) $954,986 Explanation: Allowance for doubtful accounts = ($1,026,867 × 7%) = $71,881 [The following information applies to the questions displayed below.] Jarden Company has credit sales of $3.10 million for year 2015. On December 31, 2015, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $20,676. Jarden prepares a schedule of its December 31, 2015, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here. December 31, 2015 Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 620,000 Not yet due 1.00 % 248,000 1 to 30 days past due 1.75 49,600 31 to 60 days past due 6.25 24,800 61 to 90 days past due 31.50 4,960 Over 90 days past due 65.00 ________________________________________ Required: 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2015, using the aging of accounts receivable method. Accounts Receivable Percent Uncollectible (#.##%) Estimated Uncollectible Not due: $620,000 x 1.00 % = $6,200 1 to 30: 248,000 x 1.75 % = 4,340 31 to 60: 49,600 x 6.25 % = 3,100 61 to 90: 24,800 x 31.50 % = 7,812 Over 90: 4,960 x 65.00 % = 3,224 Estimated balance of allowance for uncollectibles $24,676 credit 2. Prepare the adjusting entry to record bad debts expense at December 31, 2015. (Round your intermediate and final answers to the nearest whole dollar.) Date General Journal Debit Credit Dec 31 Bad debts expense /-54,000 Allowance for doubtful accounts /-54,000 Explanation: Unadjusted balance $ 20,676 credit Estimated balance 24,676 credit ________________________________________ ________________________________________ Required adjustment $ 4,000 credit ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Liang Company began operations on January 1, 2014. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 2014 a. Sold $1,352,000 of merchandise (that had cost $976,900) on credit, terms n/30. b. Wrote off $19,600 of uncollectible accounts receivable. c. Received $666,000 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 1.10% of accounts receivable will be uncollectible. 2015 e. Sold $1,511,700 of merchandise (that had cost $1,318,700) on credit, terms n/30. f. Wrote off $26,300 of uncollectible accounts receivable. g. Received $1,353,400 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.10% of accounts receivable will be uncollectible. Required: Prepare journal entries to record Liang’s 2014 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.) Transaction General Journal Debit Credit a(1) Accounts receivable 1,352,000 Sales 1,352,000 a(2) Cost of good sold 976,900 Merchandise inventory 976,900 b. Allowance for doubtful accounts 19,600 Accounts receivable 19,600 c. Cash 666,000 Accounts receivable 666,000 d. Bad debts expense /-126,930 Allowance for doubtful accounts /-126,930 Prepare journal entries to record Liang’s 2015 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.) Transaction General Journal Debit Credit e(1) Accounts receivable 1,511,700 Sales 1,511,700 e(2) Cost of good sold 1,318,700 Merchandise inventory 1,318,700 f. Allowance for doubtful accounts 26,300 Accounts receivable 26,300 g. Cash 1,353,400 Accounts receivable 1,353,400 h. Bad debts expense /-227,752 Allowance for doubtful accounts /- Explanation: 2014 Beginning receivables $ 0 Credit sales 1,352,000 Collections (666,000) Write-offs (19,600) ________________________________________ ________________________________________ Ending receivables 666,400 Percent uncollectible × 1.10% ________________________________________ ________________________________________ Required ending allowance 7,330** Cr. Unadjusted balance 19,600 Dr. ________________________________________ ________________________________________ Adjustment to the allowance $ 26,930 Cr. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ **rounded to nearest dollar 2015 Beginning receivables $ 666,400 Credit sales 1,511,700 Collections (1,353,400) Write-offs (26,300) ________________________________________ ________________________________________ Ending receivables 798,400 Percent uncollectible × 1.10% ________________________________________ ________________________________________ Required ending allowance 8,782** Cr. Unadjusted balance Beginning (Cr.) $ 7,330 Write-offs (Dr.) 26,300 18,970 Dr. ________________________________________ ________________________________________ ________________________________________ ________________________________________ Adjustment to the allowance $ 27,752 Cr. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ **rounded to nearest dollar The following selected transactions are from Ohlm Company: (Do not round intermediate calculations and round your final answers to nearest whole number. Use 360 days a year.) 2014 Dec. 16 Accepted a $12,900, 60-day, 8% note dated this day in granting Danny Todd a time extension on his past-due account receivable. 31 Made an adjusting entry to record the accrued interest on the Todd note. 2015 Feb. 14 Received Todd’s payment of principal and interest on the note dated December 16. Mar. 2 Accepted a(n) $6,300, 8%, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co. 17 Accepted a(n) $2,500, 30-day, 7% note dated this day in granting Ava Privet a time extension on her past-due account receivable. Apr. 16 Privet dishonored her note when presented for payment. May 31 Midnight Co. refuses to pay the note that was due to Ohlm Co. on May 31. Prepare the journal entry to charge the dishonored note plus accrued interest to Midnight Co.'s accounts receivable. July 16 Received payment from Midnight Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at 8%. Aug. 7 Accepted a(n) $8,150, 90-day, 10% note dated this day in granting a time extension on the past-due account receivable of Mulan Co. Sept. 3 Accepted a(n) $2,120, 60-day, 10% note dated this day in granting Noah Carson a time extension on his past-due account receivable. Nov. 2 Received payment of principal plus interest from Carson for the September 3 note. Nov. 5 Received payment of principal plus interest from Mulan for the August 7 note. Dec. 1 Wrote off the Privet account against Allowance for Doubtful Accounts. Required: 1-a. First, complete the table below to calculate the interest amount at December 31. D.Todd Note - December 16, 2014 Total Through Maturity Interest Recognized December 31 Principal $12,900 $12,900 Rate (%) 8 % 8 % Time 60/360 15/360 Total interest /-1$172 /-1$43 1-b. Use the calculated value to prepare your journal entries for 2014 transactions. Date General Journal Debit Credit Dec 16 Notes receivable—D. Todd 12,900 Accounts receivable—D. Todd 12,900 Dec 31 Interest receivable /-143 Interest revenue /-1 1-c. First, complete the table below to calculate the interest amounts. Total Through Maturity Midnight Co. Note - March 2, 2015 A. Privet Note - March 17, 2015 Mulan Note - August 7, 2015 Midnight Co. Note - May 31, 2015 N. Carson Note - September 3, 2015 Principal $6,300 $2,500 $8,150 $6,426 $2,120 Rate (%) 8 % 7 % 10 % 8 % 10 % Time 90/360 30/360 90/360 46/360 60/360 Total interest $126 $15 $204 $66 $35 1-d. Use those calculated values to prepare your journal entries for 2015 transactions Date General Journal Debit Credit Feb 14 Cash /-113,072 Interest revenue /-1129 Interest receivable /-143 Notes receivable—D. Todd 12,900 Mar 02 Notes receivable—Midnight Co 6,300 Accounts receivable—Midnight Co 6,300 Mar 17 Notes receivable—A. Privet 2,500 Accounts receivable—A. Privet 2,500 Apr 16 Accounts receivable—A. Privet /-12,515 Interest revenue /-115 Notes receivable—A. Privet 2,500 May 31 Accounts receivable—Midnight Co /-16,426 Interest revenue /-1126 Notes receivable—Midnight Co 6,300 Jul 16 Cash /-16,492 Interest revenue /-166 Accounts receivable—Midnight Co /-16,426 Aug 07 Notes receivable—Mulan 8,150 Accounts receivable—Mulan 8,150 Sep 03 Notes receivable—N. Carson 2,120 Accounts receivable—N. Carson 2,120 Nov 02 Cash /-12,155 Interest revenue /-135 Notes receivable—N. Carson 2,120 Nov 05 Cash /-18,354 Interest revenue /-1204 Notes receivable—Mulan 8,150 Dec 01 Allowance for doubtful accounts /-12,515 Accounts receivable—A. Privet /-1 Explanation: 2014 Dec. 31 To record interest earned [$12,900 × 0.08 × 15/360] = $43 2015 Apr. 16 To record receivable for dishonored note plus interest [$2,500 × 0.07 × 30/360] = $15 May 31 To record receivable for dishonored note [$6,300 ($6,300 × 0.08 × 90/360)] = $6,300 $126 = $6,426* *Rounded to the nearest dollar July 16 To record cash received on account plus additional interest [$6,426 × 0.08 × 46/360 = $66 (rounded)]. Nov. 2 To record cash received on note plus interest ($2,120 × 0.10 × 60/360 = $35 rounded). Nov. 5 To record cash received on note plus interest ($8,150 × 0.10 × 90/360 = $204).