Chapter 9 Accounts Receivable

Beach Boy Inc, a construction supply company uses the allowance method of accounting for uncollectible accounts receivable. Selected transactions completed by the company are as follows: Record the proper General Journal entry.

Feb 1 Sold merchandise on account to Ames Co., $8,000. The cost of the merchandise sold was $4,500.

March 15 Accepted a 60 day note 12% interest for the $8,000 from Ames Co on the account they owe.

April 9 Wrote off a $2,500 account from Dunkin Co as uncollectible.

April 21 Loaned $7,500 cash to Jill Klein, receiving a 90-day, 14% note.

May 14 Received the interest due from Ames Co. and a new 90 day, 14% note as a renewal of the loan.

July 20 Jill Klein dishonored her note.

Aug 12 Received the amount due from Ames Co plus the interest.

Dec 16 Accepted a 60 day, 12% note for $12,000 from Global to satisfy an account receivable balance.

Dec 31 It is estimated that 3% of credit sales of $1,375,000 for the year ended December 31 will be uncollectible.

Dec 31 Record the year end adjusting entry for the Global Note Receivable.

Smithy and Sons Company, a local retail store uses the direct write off method to record uncollectible accounts receivable. Record the proper General Journal entry.

June 31 a $4,200 accounts receivable balance for John Barnum has been determined to be uncollectible.

July 9 Received $1,200 from Jay Burke and wrote off the remainder owed of $3,900 as uncollectible.

October 11 Reinstated the account of Jay Burke and received $3,900 cash as payment in full.