PROBLEM 1: John Doe occasionally issues short-term notes to suppliers in return for an extension of time on payment of their accounts payable…

  1. PROBLEM 1:

John Doe occasionally issues short-term notes to suppliers in return for an extension of time on payment of their accounts payable balances. During certain parts of the year Doe finds it necessary to borrow funds at the bank to meet current expenses and to provide additional working capital. Journalize the following transactions involving notes payable issued during the current year. Calculate any missing data.

  • Jun 20 Doe borrowed $2,000 at the XYZ Bank on a 90-day, 14% note.
  • Jul 7 Doe issued a $1,550, 60-day, 13% note to Peck Supplies in payment of the accounts payable.
  • jQuery20008857859784647671_1505438626024 Paid the June 20 note at maturity, plus interest.
  • ?? Paid $650, plus interest on the July 7 note at maturity, and issued a new 45-day, 15% note for the remaining balance.

PROBLEM 2:

  1. Brown occasionally accepts short-term notes from customers that are unable to pay their accounts when due and who seek an extension. Journalize the transactions involving notes receivables accepted during the current year. Calculate any missing data.
  • Mar 6  Received a $500, 60-day 7% note dated March 6 from Jim Black in payment of his account.
  • Apr 16 Received a $600, 90-day 9% note dated April 16 from Sam Green in payment of his account.
  • ?? Received payment from Jim Black for the note due today, plus interest.
  • ?? Received $300, plus interest from Sam Green, with a new note for the remaining balance to pay off the note dated April 16.

PROBLEM 3:

The following information was taken from the accounting records of Wilson Company for the month of November, 1999:

           Merchandise Inventory, November 1………. $ 68,000

           Merchandise Inventory, November 30……….. 62,500

           Sales…………………………………………………….. 235,400

           Purchases……………………………………………… 196,250

           Freight In………………………………………………….   2,200

           Sales Returns and Allowances…………………….2,195

           Sales Discounts…………………………………………. 1,240

           Purchase Returns and Allowances……………….6,870

           Purchase Discounts…………………………………….2,135

Complete the Partial Income Statement for the month of November 30, 1999.

PROBLEM 4:

At the end of the current year, the accounts receivable balance for Moore Supplies has a debit balance $180,000 and credit sales for the year totaled $1,780,000. Give the end-of-the-period adjusting entries to enter the estimate for uncollectible accounts expense for each of the following independent assumptions.  Also provide the net receivables for each of the following assumptions.

Question 1:

  1. The Allowance for Doubtful Accounts has a $800 credit balance. The percentage of sales method is used and uncollectible accounts expense is estimated to be 3/4% (.75%) of credit sales.

Question 2:

  1. The Allowance for Doubtful Accounts has a $650 credit balance. The percentage of receivables method is used and an analysis of the accounts receivables produces an estimate of $10,790 in uncollectible accounts.

Question3:

  1. The Allowance for Doubtful Accounts has a $400 debit balance. The percentage of sales method is used and uncollectible accounts expense is estimated to be 1½%(1.5%) of credit sales.

PROBLEM 5:

Paul Wholesale deals in only one article of inventory. The following data summarizes the transactions involving inventory during the month of August :

           Inventory, August 1………………………………… 20,000 units @ $3.05

           Purchase, August 8…………………………………. 35,000 units @ $3.20

           Purchase, August 23……………………………….. 65,000 units @ $3.40

           On hand August 31, per physical count………………….. 40,000units         

Required: Calculate the amount to be assigned to the August 31 inventory and the cost of goods sold by (1) the FIFO method,(2) the weighted-average method-round to the thousandths place, and (3) the LIFO method. 

PROBLEM 6:

Chris Dixon has just purchased a special purpose machine for $40,000. Dixon thinks that 4 years will be the useful life of the asset and estimates that, at the end of that time, the salvage value will be $5,000.

PROBLEM 7:

 From the above, determine the following:

  1. The maturity value at maturity
  2. The due date of the note
  3. The face value of the note
  4. The interest due at maturity

PROBLEM 8:

  1.   A physical count of the inventory showed that actual inventory was  $26,000.
  2.   The loss from collectible accounts is figured as ½ of 1% of the total credit sales of $200,000. Use the Allowance for Doubtful Accounts.
  3.  Depreciation is figured for the store equipment that has a $50,000 cost, a $25,000 salvage value and a 5-year life. (Cost value-salvage value/years).
  4.  Actual supplies on hand totaled $2,300 as of December 31. Supplies used were $2,700.
  5.  Purchased a 1-year Prepaid Insurance policy for $2,400 on April 1. We have used 9 months.

Question 2. What is the due date of a note that is issued March 15 and is due in 30 days?

3. What is the due date of a note that is issued June 20 and is due in 3 months?

4. What is the due date of a note that is issued September 18 and is due in 90 days?

5. Compute the amount of interest on the following note and enter your answer in the box below. $2,000, 90 days, 10%?

6. Compute the amount of interest on the following note and enter your answer in the box below. $2,500, 60 days, 15%?

7. Compute the amount of interest on the following note and enter your answer in the box below. $7,500, 3 months, 8%?

Order the answer to view it

Assignment Solutions
Assignment Solutions