Question 2 Record the following transactions on the books of Sheridan Co. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On July 1, Sheridan Co. sold merchandise on account to Stacey Inc. for $21,540, terms 4/10, n/30. (b) On July 8, Stacey Inc. returned merchandise worth $2,540 to Sheridan Co. (c) On July 11, Stacey Inc. paid for the merchandise. Date Account Titles and Explanation July 1 Accounts Receivable July 8 July 8 Debit Credit Question 3 Your answer is partially correct. Try again. At the end of 2021, Marin Co. has accounts receivable of $754,500 and an allowance for doubtful accounts of $23,960. On January 24, 2022, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,624. (a) Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Allowance for Doubtful Accounts (b) Accounts Receivable Debit Credit 4,624 4,624 What is the cash realizable value of the accounts receivable before the write-off and after the write-off? Before Write-Off After Write-Off Cash realizable value 754,500 749,876 Question 4 At the end of 2021, Nash's Trading Post, LLC has accounts receivable of $635,600 and an allowance for doubtful accounts of $23,140. 1. On January 24, 2022, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,210. 2. On March 4, 2022, Nash's Trading Post, LLC receives payment of $4,210 in full from Madonna Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. Debit Credit 2. (To record recovery of accounts receivable.) (To record collection of accounts receivable.) Question 5 Swifty Corporation uses the percentage-of-receivables basis to record bad debt expense and concludes that 4% of accounts receivable will become uncollectible. Accounts receivable are $417,800 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,657. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (b) If the allowance for doubtful accounts had a debit balance of $932 instead of a credit balance of $2,657, prepare the adjusting journal entry for bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation (a) Bad Debt Expense (b) Bad Debt Expense Debit Credit Question 6 Sheridan Company uses the percentage-of-receivables basis to record bad debt expense. Accounts receivable (ending balance) $515,000 (debit) Allowance for doubtful accounts (unadjusted) 4,500 (debit) The company estimates that 3% of accounts receivable will become uncollectible. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) What is the ending (adjusted) balance in Allowance for Doubtful Accounts? Ending (adjusted) balance in Allowance for Doubtful Accounts $ () What is the cash (net) realizable value? Cash (net) realizable value Question 7 Consider these transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Blossom Company accepted a Visa card in payment of a $300 lunch bill. The bank charges a 3% fee. What entry should Blossom make? (b) Kingbird, Inc. sold its accounts receivable of $67,100. What entry should Kingbird make, given a service charge of 3% on the amount of receivables sold? No. Account Titles and Explanation Debit Credit (a) (b)