Liberty ACCT 211 Connect Homework Chapter 7 Exercises Answers Complete Solutions
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Vail Company recorded the following selected transactions during November Current Year.
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.
2. Prepare a schedule of accounts receivable.
Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, a 4% service charge for credit card sales is assessed. The second credit card that Levine accepts is the Continental Card. Continental assesses a 2.5% charge on sales for using its card.
Dexter Company applies the direct write-off method in accounting for uncollectible accounts.
Prepare journal entries to record the above selected transactions of Dexter.
At year-end (December 31), Chan Company estimates its bad debts as 0.40% of its annual credit sales of $711,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $356 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.
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At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2017, it has outstanding accounts receivable of $137,000, and it estimates that 3% will be uncollectible.
Prepare the adjusting entry to record bad debts expense for year 2017 under the assumption that the Allowance for Doubtful Accounts has:
(a) a $2,329 credit balance before the adjustment.
(b) a $685 debit balance before the adjustment.
Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.
a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method.
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 $3,700 credit.
c. 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 $200 debit.