On April 1, 2010, Tropical Aquatics purchased aquariums and equipment on account, for $25,000 from Tanks in All Shapes & Sizes, Inc. On May 1, Tropical Aquatics renegotiated its debt by signing a promissory note for two months at an interest rate of 8%. Use the accounting equation to record the transactions on April 1 and May 1 for both companies. Determine the due date of the note and use the accounting equation to record the collection of the note on the books of both companies.
Answer to relevant QuestionsUsing the data from E4-39B, calculate the accounts receivable turnover ratio for 2009. On average, how many days does it take Runnels’ Art Supply to collect its accounts receivable?In E4-39B, At the beginning of 2009, ...Evaluate the following scenarios, assuming both companies use the net credit sales as the basis for estimating bad debts expense:a. At year end, Bonnie Company has accounts receivable of $112,000. The allowance for ...Analyze the following errors that appeared on either Pet Superstore’s bank statement or in its accounting records:a. The bank recorded a deposit of $4,500 as $4,000.b. The company’s bookkeeper mistakenly recorded a ...1. Suppose one person opens the cash receipts (checks received in the mail), makes the bank deposits, and keeps the accounts receivable records. What potential problems could arise from the lack of separation of duties?2. ...Explain the terms of a purchase described as 2/15, n/30. Would you take advantage of this offer? Why or why not?
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