The following transactions were completed by Fullerton Farm Equipment Ltd
The following transactions were completed by Fullerton Farm Equipment Ltd., a distributor with a June 30 fiscal year-end. Fullerton Farm Equipment Ltd. had the following account balances on February 28, 2015:
Notes receivable ............. $ 50,000
Accounts receivable ........... 136,740
Allowance for doubtful accounts ....... (12,080)
Mar. 1. Cash is received for a $35,000 note due, plus interest for 60 days at 4%.
10. Wrote off the remaining note receivable of $15,000 as uncollectible. No interest had been accrued for this note.
12. Sold merchandise on account to Amery Co., $12,500. The cost of goods sold was $7,500.
13. Received a $20,000, 60-day, 4% note dated March 13 from Stewart Co., in exchange for a rotary tiller. The cost of goods sold was $11,500.
18. Received a $132,000, 120-day, 4% note dated March 18 from Tanner Ltd., in exchange for a tractor. The cost of goods sold was $72,200.
Apr. 15. Cash is received for the transaction of March 12.
May 12. The note dated March 13 from Stewart Co. is dishonoured. Fullerton believes the amount is collectible and transfers the balance owing, including interest, to accounts receivable.
Jun. 16. Cash is received for the amount from Stewart Co.
30. Recorded an adjusting entry for accrued interest on the note outstanding.
30. Recorded an adjusting entry for the allowance for doubtful accounts. Based on an aging of the accounts receivable balance of $136,740, it was estimated that $15,760 will be uncollectible.
Instructions
Journalize the entries to record the transactions, assuming Fullerton Farm Equipment Ltd. uses a perpetual inventory system.
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