Lenox Corp. sold merchandise for $4,500 to M. Baxter on May 15, 2017, with payment due...

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Lenox Corp. sold merchandise for $4,500 to M. Baxter on May 15, 2017, with payment due in 24 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2017, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2017, Baxter sent Lenox a check for $1,300 and offered to sign a two-month, 9%, $3,200 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2018. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: Identify and analyze all transactions on the books of Lenox Corp. from May 15, 2017, to January 31, 2018. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. The effect of the sale transaction on May 15. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Assets ADA Liabilities + Stockholders' Equity Revenues Inc How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, decrease, be sure to enter the answer with a minus sign. Activity Assets Accounts The effect of the transaction to write off the account on August 10. Statement(s) Balance Sheet Liabilities Assets Balance Sheet Check My Work 3 more Check My Work uses remaining. + How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Liabilities Stockholders' Equity + Revenues Stockholders' Equity Revenues Previous Inc Inc eBook How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. < Activity Assets Accounts Balance Sheet The effect of the transaction to reinstate the allowance account on December 1. Statement(s) Liabilities + Balance Sheet Check My Work 3 more Check My Work uses remaining. Stockholders' Equity How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Revenues Previous Inc Inc eBook How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Activity Assets Accounts Balance Sheet Statement(s) Liabilities The effect of the transaction to collect cash and receive a promissory note on December 1. < + Balance Sheet Stockholders' Equity Check My Work 3 more Check My Work uses remaining. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Revenues Stockholders' Previous -20 Inc Inc 8:47 How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Assets The effect of the adjustment on December 31. Activity Accounts Statement(s) Liabilities Stockholders' Equity Revenues Stockholders' 000 How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, I.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Inc Inc How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Activity Assets The effect of the transaction on January 31. Accounts <Statement(s) Balance Sheet Assets Liabilities Stockholders' Liabilities + Equity How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Revenues Stockholders' Equity Revenues Previous Inc Inc eBook Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, I.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet < Assets Liabilities Stockholders' Equity Revenues a. Baxter was required to do this to avoid bankruptcy. b. Baxter would want to reestablish their good credit standing with supplier in order to purchase products in the future. c. Baxter's owner could not bear the guilt of nonpayment. Inc 2. Why would Baxter bother to send Lenox a check for $1,300 on December 1 and agree to sign a note for the balance, given that such a long period of time had passed since the original purchase? Choose the best answer: Lenox Corp. sold merchandise for $4,500 to M. Baxter on May 15, 2017, with payment due in 24 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2017, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2017, Baxter sent Lenox a check for $1,300 and offered to sign a two-month, 9%, $3,200 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2018. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: Identify and analyze all transactions on the books of Lenox Corp. from May 15, 2017, to January 31, 2018. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. The effect of the sale transaction on May 15. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Assets ADA Liabilities + Stockholders' Equity Revenues Inc How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, decrease, be sure to enter the answer with a minus sign. Activity Assets Accounts The effect of the transaction to write off the account on August 10. Statement(s) Balance Sheet Liabilities Assets Balance Sheet Check My Work 3 more Check My Work uses remaining. + How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Liabilities Stockholders' Equity + Revenues Stockholders' Equity Revenues Previous Inc Inc eBook How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. < Activity Assets Accounts Balance Sheet The effect of the transaction to reinstate the allowance account on December 1. Statement(s) Liabilities + Balance Sheet Check My Work 3 more Check My Work uses remaining. Stockholders' Equity How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Revenues Previous Inc Inc eBook How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Activity Assets Accounts Balance Sheet Statement(s) Liabilities The effect of the transaction to collect cash and receive a promissory note on December 1. < + Balance Sheet Stockholders' Equity Check My Work 3 more Check My Work uses remaining. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Revenues Stockholders' Previous -20 Inc Inc 8:47 How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Assets The effect of the adjustment on December 31. Activity Accounts Statement(s) Liabilities Stockholders' Equity Revenues Stockholders' 000 How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, I.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Inc Inc How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Activity Assets The effect of the transaction on January 31. Accounts <Statement(s) Balance Sheet Assets Liabilities Stockholders' Liabilities + Equity How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Revenues Stockholders' Equity Revenues Previous Inc Inc eBook Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, I.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet < Assets Liabilities Stockholders' Equity Revenues a. Baxter was required to do this to avoid bankruptcy. b. Baxter would want to reestablish their good credit standing with supplier in order to purchase products in the future. c. Baxter's owner could not bear the guilt of nonpayment. Inc 2. Why would Baxter bother to send Lenox a check for $1,300 on December 1 and agree to sign a note for the balance, given that such a long period of time had passed since the original purchase? Choose the best answer:

Answer rating: 100% (QA)

Detailed Explanation The transactions on the books of Lenox Corp from May 15 2017 to January 31 2018 1 May 15 2017 Sale of Merchandise to M Baxter Lenox Corp sold merchandise to M Baxter for 4500 with ... View the full answer