Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 9% interest on February 1, 2019.

Required:

Determine how much interest Link will receive if the note is repaid on December 1, 2019.

Beginning accounts receivable were $80,200, and ending accounts receivable were$83,700. All sales were on credit and totaled $562,900.

Required:

Determine how much cash was collected from customers.

Beginning accounts receivable were $275,500, and ending accounts receivable were$302,300. Cash amounting to $2,965,000 was collected from customers’ credit sales.

Required:

Calculate the amount of sales on account during the period.

Beginning accounts receivable were $43,375. All sales were on account and totaled$187,600. Cash collected from customers totaled $182,450.

Required:

Calculate the ending accounts receivable balance.

At what amount should sales revenue be recorded when sales discounts are present?

What does the phrase, ‘‘Revenue is recognized at the point of sale’’ mean?

a. Revenue is recorded in the accounting records when the cash is received from a customer and reported on the income statement when sold to the customer.

b. Revenue is recorded in the accounting records and reported on the income statement when goods are sold and delivered to the customer.

c. Revenue is recorded in the accounting records when the goods are sold to a customer and reported on the income statement when the cash payment is received from the customer.

d. Revenue is recorded in the accounting records and reported on the income statement when the cash is received from the customer.

At December 31, 2019, Garner has a $15,000 credit balance in its allowance for doubtful accounts. Garner estimates that 3% of its 2019 credit sales will eventually default. During 2019, Garner had credit sales of$970,000.

Required:

Estimate the bad debt expense under the percentage of credit sales method.

On January 1, 2019, Smith Inc. has the following balances for accounts receivable and allowance for doubtful accounts:

Accounts Receivable, $382,000

Allowance for Doubtful Accounts (a credit balance),$4,200

During 2019, Smith had $2,865,000 of credit sales, collected$2,905,000 of accounts receivable, and wrote off $3,850 of accounts receivable as uncollectible. At year end, Smith performs an aging of its accounts receivable balance and estimates that$3,800 will be uncollectible.

Required:

Prepare the necessary adjusting entry for 2019.

On January 1, 2019, Smith Inc. has the following balances for accounts receivable and allowance for doubtful accounts:

Accounts Receivable, $382,000

Allowance for Doubtful Accounts (a credit balance),$4,200

During 2019, Smith had $2,865,000 of credit sales, collected$2,905,000 of accounts receivable, and wrote off $3,850 of accounts receivable as uncollectible. At year end, Smith performs an aging of its accounts receivable balance and estimates that$3,800 will be uncollectible.

Required:

Calculate Smith’s preadjustment balance in allowance for doubtful accounts on December 31, 2019.

On January 1, 2019, Hungryman Inc. has the following balances for accounts receivable and allowance for doubtful accounts:

Accounts Receivable, $1,280,000

Allowance for Doubtful Accounts (a credit balance), 44,000

During 2019, Hungryman had$18,500,000 of credit sales, collected $17,945,000 of accounts receivable, and wrote off$60,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible.

Required:

Prepare the necessary adjusting entry for 2019.

On January 1, 2019, Hungryman Inc. has the following balances for accounts receivable and allowance for doubtful accounts:

Accounts Receivable, $1,280,000

Allowance for Doubtful Accounts (a credit balance), 44,000

During 2019, Hungryman had$18,500,000 of credit sales, collected $17,945,000 of accounts receivable, and wrote off$60,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible.

Required:

Calculate Hungryman’s preadjustment balance in allowance for doubtful accounts on December 31, 2019.

The Rock has credit sales of $425,000 during 2019 and estimates at the end of 2019 that 1.5% of these credit sales will eventually default. Also, during 2019 a customer defaults on a$1,200 balance related to goods purchased in 2019.

Required:

Prepare the adjusting entry to record the bad debt expense for 2019.

Clarissa Company has credit sales of $550,000 during 2019 and estimates at the end of 2019 that 2.5% of these credit sales will eventually default. Also, during 2019 a customer defaults on a$775 balance related to goods purchased in 2018. Prior to the write-off for the $775 default, Clarissa’s accounts receivable and allowance for doubtful accounts balances were$402,000 and $129 (credit), respectively.

Required:

Prepare the adjusting entry to record the bad debt expense for 2019.

Bolton sold a customer service contract with a price of $37,000 to Sammy’s Wholesale Company. Bolton offered terms of 1/10, n/30 and expects Sammy to pay within the discount period.

Required:

Prepare the journal entry assuming the payment is made after 10 days (after the discount period).