You are a new supervisory accountant at Sportsman Company, reporting to the controller. On your second...
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You are a new supervisory accountant at Sportsman Company, reporting to the controller. On your second day with Sportsman, a junior accountant quit his job with no notice. One day later, it is time to prepare closing entries for March. The controller has asked you to review and correct, if necessary, the general ledger account for accounts receivable (A/R) prepared by the junior accountant. You have been provided with access to the same materials and information pertaining to the A/R subsidiary ledger (subledger) that junior accountant had in preparing the general ledger balance. You were also informed that the March A/R beginning balance of $489,300 balanced with the A/R subledger as of March 1, Year 6. Review the general ledger account for accounts receivable prepared by the junior accountant to ensure it is accurate and consistent with the information and documents provided. (For each section of underlined text below select the needed correction from the dropdown list. If the underlined text is already correct in the context of the memo, select [Original text] from the list. If none of the choices are correct, select [Delete text] from the list.) Account: Accounts Receivable Date Description 3/1/Year 6 Beginning balance 3/22/Year 6 Sales return 3/25/Year 6 Write-off officer loan 3/29/Year 6 Assignment 3/29/Year 6 Write-off customer accounts 3/29/Year 6 Recovery 3/31/Year 6 March sales 3/31/Year 6 March collections Post Ref. Debit 25,600 636,250 Account Number: 120 Credit 1,200 12,500 17,000 14,000 314,800 Balance 489,300 488,100 475,600 458,600 484,200 470,200 1,106,450 791,650 Sportsman Company Monthly Sales Report-March, Year 6 Cash sales Credit sales Total gross sales Less: sales returns Net sales I was told that the sales returns were all on credit sales -JA. $360,850 $275,400 $636,250 ($12,000) $648,250 Sportsman Company Cash Receipts Report - March, Year 6 Cash sales Collections on credit sales Total cash receipts $360,850 $314,800 $675,650 To: Junior Accountant From: Zach Barnes, Accounts Receivable Clerk Assignment of Accounts Receivable Re: Date: March 29, Year 6 Per instructions of the controller, we have finalized the assignment of the following accounts receivables and made the required adjustments to the subsidiary accounts receivable ledger: 3/29/Year 6: Transferred accounts receivable with a net realization value of $20,000 for $17,000 to Fastcash Finance Company. Fastcash withheld $2,000 from the proceeds for projected future reductions. We have surrendered control of these receivables. -Zach Sportsman Company Minutes of Special Meeting of March 22, Year 6 Members Present: All seven members present. Agenda items: 2. 1. Approval of agreement to a settlement in product liability suit against the Company by A.C. Sident. Motion to deem $12,500 loan to Teresa Sconder, former officer of the Company, uncollectible. Approval of new business casual dress code for Company headquarters. 3. Actions taken: 1. Agenda item #1 not approved. 2. Agenda item #2 approved. 3. Agenda item #3 approved by majority. From: Sent: To: Subject: mvisalia@sportsman.com March 29, Year 6 'jr.accountant@highsteppers.com' Inventory questions Hello junior accountant: Per your question regarding customer write-offs, our policy is to write off accounts receivable when the account is placed in collection. We would rather do that than carry an inflated A/R balance and see our Days Sales Outstanding numbers suffer. In other words, it keeps the A/R balance clean and meaningful. We can always recover accounts that do end up getting collected. For your reference, that's just one approach. Other companies might wait until they actually receive written notice from the collection agency that an account proves uncollectible, or until the customer files for bankruptcy, or the company's lawyers advise of a possible write-off situation, or what have you. There is the argument that, if you're too quick to write off an account, it goes 'out of sight out of mind' and the company has less pressure to either collect on that account or ensure new customers are creditworthy. Anyway, since the weekend is upon us, I can tell you that for March accounts placed into collection totaled $25,600 and recoveries totaled $14,000. The latter is just for one account where the customer called and promised they're going to pay and assured us they will pay very soon. We believe them, so we consider it a recovery, but we haven't actually collected on the account yet. We're not going to tell you to write off or recover any accounts on Saturday or Sunday, haha. Enjoy your weekend! McKenzie McKenzie Visalia, Credit Manager Sportsman Company mvisalia@sportsman.com Highlight #1 The 22 March sales return credit entry of $1,200 is correct. H Choose an option [Replace with] The 22 March sales return entry should be a debit entry of $14,000. [Replace with] The 22 March sales return entry should be a credit entry of $14,000. [Replace with] The 22 March sales return entry should be a debit entry of $12,000. [Replace with] The 22 March sales return entry should be a credit entry of $12,000. [Replace with] The 22 March sales return entry should be removed. Highlight #2 The 25 March officer loan write-off credit entry of $12,500 is correct. Choose an option EB. Cal 47. [Original text] The 25 March officer loan write-off credit entry of $12,500 is correct. [Delete text] [Replace with] The 25 March officer loan write-off should be a debit entry of $12,500. [Replace with] The 25 March officer loan write-off should be dated 22 March. [Replace with] The 25 March officer loan write-off should be removed because the loan should be turned over to a collection agency before being deemed uncollectible. ← Highlight #3 The 29 March assignment credit entry of $17,000 is correct. - Choose an option LA [Original text] The 29 March assignment credit entry of $17,000 is correct. [Delete text] [Replace with] The 29 March assignment entry should be a debit entry of $17,000. [Replace with] The 29 March assignment entry should be a credit entry of $18,000. [Replace with] The 29 March assignment entry should be a debit entry of $18,000. [Replace with] The 29 March assignment entry should be a credit entry of $20,000. Highlight #4 The 29 March customer account write-off debit entry of $25,600 is correct. 1.11. Choose an option ALLER [Original text] The 29 March customer account write-off debit entry of $25,600 is correct. [Delete text] [Replace with] The 29 March customer account write-off entry should be a credit entry of $25,600. [Replace with] The 29 March customer account write-off entry should be a debit entry of $14,000. [Replace with] The 29 March customer account write-off entry should be a credit entry of $14,000. DETAL Highlight #5 The 29 March customer account recovery credit entry of $14,000 is correct. LE. PALLE [Delete text] Choose an option [Replace with] The 29 March customer account recovery entry should be a debit entry of $14,000. [Replace with] The 29 March customer account recovery entry should be a credit entry of $25,600. [Replace with] The 29 March customer account recovery entry should be a debit entry of $25,600. [Replace with] The 29 March customer account recovery entry should be removed until the customer begins paying on the account. Highlight #6 The 31 March credit sales debit entry of $636,250 is correct. LELA47 - Choose an option [Original text] The 31 March credit sales debit entry of $636,250 is correct. [Delete text] [Replace with] The 31 March credit sales entry should be a credit entry of $636,250. [Replace with] The 31 March credit sales entry should be a debit entry of $275,400. [Replace with] The 31 March credit sales entry should be a debit entry of $263,400. [Roplaco with The 21 March credit calor ontor should be a dobit ontne of $214 900 Highlight #7 The 31 March credit sales credit entry of $314,800 is correct. LE. ← Choose an option Lohtyinar cexcy me 31 March credit sales creant entry of $314,800 is correct. [Delete text] [Replace with] The 31 March credit sales entry should be a debit entry of $314,800. [Replace with] The 31 March credit sales entry should be a credit entry of $275,400. [Replace with] The 31 March credit sales entry should be a credit entry of $263,400. [Replace with] The 31 March credit sales entry should be a credit entry of $360,850. Highlight #8 The March ending balance of $791,650 is correct. - Choose an option [Delete text] [Replace with] The March ending balance should be $406,300. [Replace with] The March ending balance should be $409,300. [Replace with] The March ending balance should be $383,800. [Replace with] The March ending balance should be $392,300. You are a new supervisory accountant at Sportsman Company, reporting to the controller. On your second day with Sportsman, a junior accountant quit his job with no notice. One day later, it is time to prepare closing entries for March. The controller has asked you to review and correct, if necessary, the general ledger account for accounts receivable (A/R) prepared by the junior accountant. You have been provided with access to the same materials and information pertaining to the A/R subsidiary ledger (subledger) that junior accountant had in preparing the general ledger balance. You were also informed that the March A/R beginning balance of $489,300 balanced with the A/R subledger as of March 1, Year 6. Review the general ledger account for accounts receivable prepared by the junior accountant to ensure it is accurate and consistent with the information and documents provided. (For each section of underlined text below select the needed correction from the dropdown list. If the underlined text is already correct in the context of the memo, select [Original text] from the list. If none of the choices are correct, select [Delete text] from the list.) Account: Accounts Receivable Date Description 3/1/Year 6 Beginning balance 3/22/Year 6 Sales return 3/25/Year 6 Write-off officer loan 3/29/Year 6 Assignment 3/29/Year 6 Write-off customer accounts 3/29/Year 6 Recovery 3/31/Year 6 March sales 3/31/Year 6 March collections Post Ref. Debit 25,600 636,250 Account Number: 120 Credit 1,200 12,500 17,000 14,000 314,800 Balance 489,300 488,100 475,600 458,600 484,200 470,200 1,106,450 791,650 Sportsman Company Monthly Sales Report-March, Year 6 Cash sales Credit sales Total gross sales Less: sales returns Net sales I was told that the sales returns were all on credit sales -JA. $360,850 $275,400 $636,250 ($12,000) $648,250 Sportsman Company Cash Receipts Report - March, Year 6 Cash sales Collections on credit sales Total cash receipts $360,850 $314,800 $675,650 To: Junior Accountant From: Zach Barnes, Accounts Receivable Clerk Assignment of Accounts Receivable Re: Date: March 29, Year 6 Per instructions of the controller, we have finalized the assignment of the following accounts receivables and made the required adjustments to the subsidiary accounts receivable ledger: 3/29/Year 6: Transferred accounts receivable with a net realization value of $20,000 for $17,000 to Fastcash Finance Company. Fastcash withheld $2,000 from the proceeds for projected future reductions. We have surrendered control of these receivables. -Zach Sportsman Company Minutes of Special Meeting of March 22, Year 6 Members Present: All seven members present. Agenda items: 2. 1. Approval of agreement to a settlement in product liability suit against the Company by A.C. Sident. Motion to deem $12,500 loan to Teresa Sconder, former officer of the Company, uncollectible. Approval of new business casual dress code for Company headquarters. 3. Actions taken: 1. Agenda item #1 not approved. 2. Agenda item #2 approved. 3. Agenda item #3 approved by majority. From: Sent: To: Subject: mvisalia@sportsman.com March 29, Year 6 'jr.accountant@highsteppers.com' Inventory questions Hello junior accountant: Per your question regarding customer write-offs, our policy is to write off accounts receivable when the account is placed in collection. We would rather do that than carry an inflated A/R balance and see our Days Sales Outstanding numbers suffer. In other words, it keeps the A/R balance clean and meaningful. We can always recover accounts that do end up getting collected. For your reference, that's just one approach. Other companies might wait until they actually receive written notice from the collection agency that an account proves uncollectible, or until the customer files for bankruptcy, or the company's lawyers advise of a possible write-off situation, or what have you. There is the argument that, if you're too quick to write off an account, it goes 'out of sight out of mind' and the company has less pressure to either collect on that account or ensure new customers are creditworthy. Anyway, since the weekend is upon us, I can tell you that for March accounts placed into collection totaled $25,600 and recoveries totaled $14,000. The latter is just for one account where the customer called and promised they're going to pay and assured us they will pay very soon. We believe them, so we consider it a recovery, but we haven't actually collected on the account yet. We're not going to tell you to write off or recover any accounts on Saturday or Sunday, haha. Enjoy your weekend! McKenzie McKenzie Visalia, Credit Manager Sportsman Company mvisalia@sportsman.com Highlight #1 The 22 March sales return credit entry of $1,200 is correct. H Choose an option [Replace with] The 22 March sales return entry should be a debit entry of $14,000. [Replace with] The 22 March sales return entry should be a credit entry of $14,000. [Replace with] The 22 March sales return entry should be a debit entry of $12,000. [Replace with] The 22 March sales return entry should be a credit entry of $12,000. [Replace with] The 22 March sales return entry should be removed. Highlight #2 The 25 March officer loan write-off credit entry of $12,500 is correct. Choose an option EB. Cal 47. [Original text] The 25 March officer loan write-off credit entry of $12,500 is correct. [Delete text] [Replace with] The 25 March officer loan write-off should be a debit entry of $12,500. [Replace with] The 25 March officer loan write-off should be dated 22 March. [Replace with] The 25 March officer loan write-off should be removed because the loan should be turned over to a collection agency before being deemed uncollectible. ← Highlight #3 The 29 March assignment credit entry of $17,000 is correct. - Choose an option LA [Original text] The 29 March assignment credit entry of $17,000 is correct. [Delete text] [Replace with] The 29 March assignment entry should be a debit entry of $17,000. [Replace with] The 29 March assignment entry should be a credit entry of $18,000. [Replace with] The 29 March assignment entry should be a debit entry of $18,000. [Replace with] The 29 March assignment entry should be a credit entry of $20,000. Highlight #4 The 29 March customer account write-off debit entry of $25,600 is correct. 1.11. Choose an option ALLER [Original text] The 29 March customer account write-off debit entry of $25,600 is correct. [Delete text] [Replace with] The 29 March customer account write-off entry should be a credit entry of $25,600. [Replace with] The 29 March customer account write-off entry should be a debit entry of $14,000. [Replace with] The 29 March customer account write-off entry should be a credit entry of $14,000. DETAL Highlight #5 The 29 March customer account recovery credit entry of $14,000 is correct. LE. PALLE [Delete text] Choose an option [Replace with] The 29 March customer account recovery entry should be a debit entry of $14,000. [Replace with] The 29 March customer account recovery entry should be a credit entry of $25,600. [Replace with] The 29 March customer account recovery entry should be a debit entry of $25,600. [Replace with] The 29 March customer account recovery entry should be removed until the customer begins paying on the account. Highlight #6 The 31 March credit sales debit entry of $636,250 is correct. LELA47 - Choose an option [Original text] The 31 March credit sales debit entry of $636,250 is correct. [Delete text] [Replace with] The 31 March credit sales entry should be a credit entry of $636,250. [Replace with] The 31 March credit sales entry should be a debit entry of $275,400. [Replace with] The 31 March credit sales entry should be a debit entry of $263,400. [Roplaco with The 21 March credit calor ontor should be a dobit ontne of $214 900 Highlight #7 The 31 March credit sales credit entry of $314,800 is correct. LE. ← Choose an option Lohtyinar cexcy me 31 March credit sales creant entry of $314,800 is correct. [Delete text] [Replace with] The 31 March credit sales entry should be a debit entry of $314,800. [Replace with] The 31 March credit sales entry should be a credit entry of $275,400. [Replace with] The 31 March credit sales entry should be a credit entry of $263,400. [Replace with] The 31 March credit sales entry should be a credit entry of $360,850. Highlight #8 The March ending balance of $791,650 is correct. - Choose an option [Delete text] [Replace with] The March ending balance should be $406,300. [Replace with] The March ending balance should be $409,300. [Replace with] The March ending balance should be $383,800. [Replace with] The March ending balance should be $392,300.
Expert Answer:
Answer rating: 100% (QA)
Accounts Receivable for the month of march Date Description Debit Credit Balance 03Jan Beginning bal... View the full answer
Related Book For
Business Statistics A First Course
ISBN: 978-0321979018
7th edition
Authors: David M. Levine, Kathryn A. Szabat, David F. Stephan
Posted Date:
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