Accounting problems
Problem 1
Presented below are various receivable transactions entered
into by Brewer Tool Company. Indicate whether the receivables are reported as
accounts receivable, notes receivable, or other receivables on the balance
sheet.
a. Loaned a
company officer $4,000 ______________
b. Accepted
a $2,000 promissory note from a customer as payment on account. ____________
c. Determined
that $10,000 income tax refund is due from the IRS. ___________
d. Sold
goods to a customer on account for $5,000 _________
e. Recorded
$500 accrued interest on a note receivable due next year. ____________
f. Made an
American Express credit card sale for $3,000
g. Advanced
$1,000 to a trusted employee ___________
Problem 2
On October 1st, 2008. Foster Company establishes an imprest
petty cash fund by issuing a check for $300 to Mary Mann, the custodian of the
petty cash fund. On October 31, 2008, Mary Mann submitted the following paid
petty cash receipts for replenishment of the petty cash fund when there is a
$55 cash in the fund:
Freight-In 57
Office Supplies Expense 55
Entertainment of Cliente 90
Postage expense 40
Instructions:
Prepare the journal entries required to establish the petty
cash fund on October 1st and the replenishment of the fund on October 31st.
Problem 3
Ogleby Boat Company’s bank statement for the month of
September showed a balance per bank of $8,000. The company’s Cash account in
the general ledger had a balance of $6,459 at September 30. Other information
is as follows:
1- Cash
receipts for September 30 recorded on the company’s books were $7,700 but this
amount does not appear on the bank statement.
2- The bank
statement shows a debit memorandum for $40 for check printing charges.
3- Check No.
119 payable to Lann Company was recored in the cash payments journal and
cleared the bank for $248. A review of the accounts payable subsidiary ledger
shows a $36 credit balance in the account of Lann Company and that the payment
to them should have been for $284.
4- The Total
amount of checks still outstanding at September 30 amounted to $6,000
5- Check No.
138 was correctly written and paid by the bank for $408. The cash payment
journal reflects an entry for Check No. 138 as a debit to Accounts Payable and
a credit to Cash in Bank for $490.
6- The bank
returned an NSF check from a customer for $360.
7- The bank
included a credit memorandum for $1,560 which represents collection of a
customer’s note by the bank for the company; principal amount of the note was
$1,500 and interest was $60. Interest has not been accrued.
Instructions:
a- Prepare a
bank reconciliation for Ogleby Boat company at September 30.
b- Prepare
any adjusting entries necessary as a result of the bank reconciliation.
Problem 4
The following information is available for Wenger Company
Beginning accounts receivable $800,000
Ending accounts receivable 1,200,000
Net sales 10,000,000
Instructions:
Compute the receivables turnover ratio and the average
collection period.
Problem 5
Brama distributors has the following transactions related to
notes receivable during the last two months of the year.
Dec. 1st Loaned $120,000 cash to E. Hoffer on a 1-year, 6%
note.
Dec. 2nd Sold goods to J. Smith, receiving a $24,000,
60-day, 7% note.
Dec. 31st Accrued interest revenue on all notes receivable.
Instructions:
Journalize the transactions for Brama Distributors.
Problem 6
Lloyd Products is undecided about which base to use in
estimating uncollectible accounts. On December 31st, 2008. The balance in
accounts receivable was $680,00 and the net credit sales amounted to $3,500,000
during 2008. An aging analysis of the accounts receivable indicated that
$36,000 in accounts are expected to be uncollectible. Past experience has shown
that about 1% of net credit sales eventually are uncollectible.
Instructions:
Prepare the adjusting entries to record estimated bad debts
expense using the (1) percentage of sales basis and (2) the percentage of
receivables basis under each of the following independent assumptions:
a- Allowance
for Doubtful accounts has a credit balance of $3,200 before adjustment.
b- Allowance
for Doubtful accounts has a credit balance of $730 before adjustment.
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