Problem 1: Journalize the following transactions using the allowance method of accounting for uncollectible receivables.  

  

Apr.   1  Sold merchandise on account to Rhen Smithe, $25,000.  The cost of the merchandise is $9,200.

  

Sep. 10  Received payment for one-fifth of the receivable from R. Smithe and wrote off the remainder.

  

Dec.   9  Reinstated the account of R. Smithe and received cash in full payment.

ANSWER:  

Journal			Page 6
Date	Description	Debit	Credit

Problem 2: List at least four indicators that a receivable may be uncollectible.

ANSWER:

Answers may vary. 1.   2. 3. 4.

Problem 3: Determine the due date and amount of interest due at maturity on the following notes:

	Origination	Face	Term	Interest	Maturity	Interest
	Date	Amount	of Note	Rate	Date	Amount
(a)	August 15	$20,500	60 days	6%	_______	_______
(b)	May 20	$15,000	180 days	8%	_______	_______

Problem 4: Journalize the following transactions for River Company. Round numbers to the nearest dollar.

November 19 Received a $20,500.00, 90-day, 12% note from Alan Snow in payment of his account.

December 31 Accrued interest on the Snow note.

February 17 Received the amount due from Snow on his note.

ANSWER

Journal			Page 5
Date	Description	Debit	Credit

Answer rating: 100% (QA)

The transactions are journalized below Date Account Title and Explanation Debit Credit April 1 Accou... View the full answer