BE7-1 Kraft Enterprises owns the following assets at December 31,2014
cash in bank-savings account $68000
cash on hand $9,300
cash refund due from IRS $31,400
checking account balance $17,000
posted checks $750
certificates of deposit (180 days) $90,000
What amount should be reported as cash?
2Restin Co. uses the gross method to record sales made on credit. On June 1,2014, it made sales of $50,000 with terms 3/15, n/45. On June 12,2014, Restin received full payment for the June 1 sale. Prepare the required journal entries for Restin Co.
3 Use the info in 7-2, assuming Restin Co. uses the net method to account for cash discounts. Prepare the required journal entries for Restin Co.
4 Wilton, Inc. had net sales in 2014 of $1,400,000. At December 31, 2014, before adjusting entries, the balance in selected accounts were: Accounts receivable $250,000 debit, and Allowance for doubtful accounts $2,400 credit. If Wilton estimates that 2% of its net sales will prove to be uncollectible, prepare the December 31, 2014, journal entry to record debt expense.
5 Use the info in 7-4 for Wilton, Inc
a) instead of estimating the uncollectible at 2% of net sales, assume that 10% of accounts receivables will prove to be uncollectible. Prepare the entry to collect bad debt expense
b)Instead of estimating uncollectable at 2% of net sales, assume Wilton prepares an aging schedule that estimates total uncollectible accounts at $24,600. Prepare the entry to record bad debt expense.
6 Milner Family Importers sold goods to Tung Decorators for 30,000 on November 1, 2014 accepting Tung's $30,000, 6-months, 6% note. Prepare Milner's November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest
7 Dold Acrobats lent $16.529 to Donaldson, Inc., accepting Donaldson's 2-year, $20,000, zero-interest bearing note. The implied interest rate is 10%. Prepare Dold's journal entries for the initial transaction, recognition of interest each year, and the collection of $20,000 at maturity.
8 On October 1, 2014 Chung, Inc, assigns $1,000,000 of its accounts receivables to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivable assigned and interest of the note of 9%. Prepare the October 1 journal entries for both Chung and Seneca.
9 Wood Incorporated factored $150,000 of accounts receivables with Engram Factors Inc. on a without recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood Incorporated and Engram Factors to record the factoring of the accounts receivable to Engram
10 Using the info in 7-9 for Wood. Assume that the receivables are sold with recourse. Prepare the journal entry for Wood to record the sale, assuming that the recourse liability has a fair value of $7,500.