plant assets, natural resources, and intangibles
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Plant Assets, Natural Resources, and Intangibles. Chapter 9 Exercises. Lump-Sum Purchases. In-Class Exercise : Exercise No. Page E9-18590 Lump-Sum Purchases. Lump-Sum Purchases. Exercise E9-17 - PowerPoint PPT PresentationTRANSCRIPT
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Chapter 9Exercises
Accounting for Receivables
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Percent of SalesPercent of SalesPercent of SalesPercent of Sales
• In-Class Exercise:
Exercise No. Page 9-4 382 Percent of Sales Method
• In-Class Exercise:
Exercise No. Page 9-4 382 Percent of Sales Method
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Exercise 9-4 (Percent of Sales Method)
At year-end (December 31), Alvare Company estimates its bad debts as 0.5% of its annual credit sales of $875,000. Alvare records its Bad Debts Expense for that estimate.
On the following February 1, Alvare decides that the $420 account of P. Coble is uncollectible and writes it off as a bad debt.
On June 5, Coble unexpectedly pays the amount previously written off.
Prepare the journal entries of Alvare to record these transactions and events of December 31, February1, and June 5.
Exercise 9-4 (Percent of Sales Method)
At year-end (December 31), Alvare Company estimates its bad debts as 0.5% of its annual credit sales of $875,000. Alvare records its Bad Debts Expense for that estimate.
On the following February 1, Alvare decides that the $420 account of P. Coble is uncollectible and writes it off as a bad debt.
On June 5, Coble unexpectedly pays the amount previously written off.
Prepare the journal entries of Alvare to record these transactions and events of December 31, February1, and June 5.
Percent of Sales MethodPercent of Sales MethodPercent of Sales MethodPercent of Sales Method
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Percent of Sales MethodPercent of Sales MethodPercent of Sales MethodPercent of Sales Method
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Percent of Accounts ReceivablePercent of Accounts ReceivablePercent of Accounts ReceivablePercent of Accounts Receivable
• In-Class Exercise):
Exercise No. Page 9-5 382 Percent of Accounts Receivable
Method
• In-Class Exercise):
Exercise No. Page 9-5 382 Percent of Accounts Receivable
Method
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Exercise 9-5 (Percent of Receivables Method)
At each calendar year-end, Cabool Supply Co. uses the percent of accounts receivable method to estimate bad debts.
On December 31, 2011, it has outstanding accounts receivable of $53,000, and it estimates that 4% will be uncollectible.
Prepare the adjusting entry to record bad debts expense for year 2011 under the assumption that the Allowance for Doubtful Accounts has:
(a) a $915 credit balance before the adjustment, and
(b) a $1,332 debit balance before the adjustment.
Exercise 9-5 (Percent of Receivables Method)
At each calendar year-end, Cabool Supply Co. uses the percent of accounts receivable method to estimate bad debts.
On December 31, 2011, it has outstanding accounts receivable of $53,000, and it estimates that 4% will be uncollectible.
Prepare the adjusting entry to record bad debts expense for year 2011 under the assumption that the Allowance for Doubtful Accounts has:
(a) a $915 credit balance before the adjustment, and
(b) a $1,332 debit balance before the adjustment.
Percent of Accounts Receivable MethodPercent of Accounts Receivable MethodPercent of Accounts Receivable MethodPercent of Accounts Receivable Method
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(
Percent of Accounts Receivable MethodPercent of Accounts Receivable MethodPercent of Accounts Receivable MethodPercent of Accounts Receivable Method
(
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Aging of Accounts ReceivableAging of Accounts ReceivableAging of Accounts ReceivableAging of Accounts Receivable
• In-Class Exercise:
Exercise No. Page 9-6 379 Aging of Accounts Receivable
Method
• In-Class Exercise:
Exercise No. Page 9-6 379 Aging of Accounts Receivable
Method
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Exercise 9-6 (Aging of Receivables Method)
Hecter Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.
Days Pas Due . Total 0 1 to 30 31 to 60 61 to 90 Over 90 .
Accounts receivable……190,000 $132,000 $30,000 $12,000 $6,000 $10,000
Percent uncollectible….. 1% 2% 4% 7% 12%
(a) Estimate the balance of the 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 $600 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 $400 debit.
Exercise 9-6 (Aging of Receivables Method)
Hecter Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.
Days Pas Due . Total 0 1 to 30 31 to 60 61 to 90 Over 90 .
Accounts receivable……190,000 $132,000 $30,000 $12,000 $6,000 $10,000
Percent uncollectible….. 1% 2% 4% 7% 12%
(a) Estimate the balance of the 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 $600 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 $400 debit.
Aging of Accounts Receivable MethodAging of Accounts Receivable MethodAging of Accounts Receivable MethodAging of Accounts Receivable Method
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Aging of Accounts Receivable MethodAging of Accounts Receivable MethodAging of Accounts Receivable MethodAging of Accounts Receivable Method
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Aging of Accounts Receivable MethodAging of Accounts Receivable MethodAging of Accounts Receivable MethodAging of Accounts Receivable Method
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
• In-Class Exercise:
Exercise No. Page 9- 13 384 Notes Receivable
Transactions
• In-Class Exercise:
Exercise No. Page 9- 13 384 Notes Receivable
Transactions
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Exercise 9-13
Prepare journal entries for the following selected transactions of Deshawn Company for 2010.
2010Dec. 13 Accepted a $10,000, 45-day, 8% note dated December 13 in granting Latisha Clark a time extension on her past-due accounts receivable.
31 Prepared an adjusting entry to record the accrued interest on the Clark note.
Exercise 9-13
Prepare journal entries for the following selected transactions of Deshawn Company for 2010.
2010Dec. 13 Accepted a $10,000, 45-day, 8% note dated December 13 in granting Latisha Clark a time extension on her past-due accounts receivable.
31 Prepared an adjusting entry to record the accrued interest on the Clark note.
Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
• In-Class Exercise:
Exercise No. Page 9- 14 384 Notes Receivable
Transactions
• In-Class Exercise:
Exercise No. Page 9- 14 384 Notes Receivable
Transactions
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
Interest = $10,000 x 8’% x 45/360 = $100Interest = $10,000 x 8’% x 45/360 = $100Maturity Value = $10,000 + $100 = $10,100Maturity Value = $10,000 + $100 = $10,100
Interest = $10,000 x 8’% x 45/360 = $100Interest = $10,000 x 8’% x 45/360 = $100Maturity Value = $10,000 + $100 = $10,100Maturity Value = $10,000 + $100 = $10,100Interest = $10,000 x 8’% x 45/360 = $100Interest = $10,000 x 8’% x 45/360 = $100Maturity Value = $10,000 + $100 = $10,100Maturity Value = $10,000 + $100 = $10,100
Interest = $10,000 x 8’% x 45/360 = $100Interest = $10,000 x 8’% x 45/360 = $100Maturity Value = $10,000 + $100 = $10,100Maturity Value = $10,000 + $100 = $10,100
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
Interest Accrual from December 31Interest Accrual from December 31Interest Accrual from December 31Interest Accrual from December 31
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
Interest = $100 - $40 = $60Interest = $100 - $40 = $60or $10,000 x 8’% x 27/360 = $60or $10,000 x 8’% x 27/360 = $60
Interest = $100 - $40 = $60Interest = $100 - $40 = $60or $10,000 x 8’% x 27/360 = $60or $10,000 x 8’% x 27/360 = $60
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
Interest = $2,000 x 9’% x 30/360 = $15Interest = $2,000 x 9’% x 30/360 = $15Maturity Value = $2,000 + $15 = $2,015Maturity Value = $2,000 + $15 = $2,015
Interest = $2,000 x 9’% x 30/360 = $15Interest = $2,000 x 9’% x 30/360 = $15Maturity Value = $2,000 + $15 = $2,015Maturity Value = $2,000 + $15 = $2,015
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
Interest = $4,000 x 10’% x 90/360 = $100Interest = $4,000 x 10’% x 90/360 = $100Maturity Value = $4,000 + $100 = $4,100Maturity Value = $4,000 + $100 = $4,100
Interest = $4,000 x 10’% x 90/360 = $100Interest = $4,000 x 10’% x 90/360 = $100Maturity Value = $4,000 + $100 = $4,100Maturity Value = $4,000 + $100 = $4,100
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
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Notes ReceivableNotes ReceivableNotes ReceivableNotes Receivable
• In-Class Exercise:
Exercise No. Page HO 9-1 HO Discounting a Note
(Information for the exercise is reflected on the next chart)
• In-Class Exercise:
Exercise No. Page HO 9-1 HO Discounting a Note
(Information for the exercise is reflected on the next chart)
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Discounting Notes ReceivableDiscounting Notes ReceivableDiscounting Notes ReceivableDiscounting Notes Receivable
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Discounting Notes ReceivableDiscounting Notes ReceivableDiscounting Notes ReceivableDiscounting Notes Receivable
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Discounting Notes ReceivableDiscounting Notes ReceivableDiscounting Notes ReceivableDiscounting Notes Receivable