For Each Of The Following Independent Situations Compute Net Account Receivables

Question 1

For each of the following independent situations, compute net accounts receivable.

a. Accounts Receivable has a balance of $14,000. The Allowance for Uncollectible Accounts has a credit balance prior to adjustment of $300. An aging schedule prepared on December 31 reveals $1,100 of uncollectible accounts.

b. Accounts Receivable has a balance of $25,700. The Allowance for Uncollectible Accounts has a debit balance prior to adjustment of $400. An aging schedule prepared on December 31 reveals $2,300 of uncollectible accounts.

c. Accounts Receivable has a balance of $84,000. The Allowance for Uncollectible Accounts has a credit balance prior to adjustment of $300. Net credit sales for the year are $250,000 and 3% is estimated to be uncollectible.
d.
Accounts Receivable has a balance of $83,000. The Allowance for Uncollectible Accounts has a debit balance prior to adjustment of $400. Net credit sales for the year are $250,000 and 3% is estimated to be uncollectible.

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|1 |(a) |Accounts receivables |$14,000 |
| | |Allowance for Uncollectible accounts balance |$1,100 |
| | | | |
| | |Net Accounts receivable (14000 less 1100) |$12,900 |
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| |(b) |Accounts Receivables |$25,700 |
| | |Allowance for Uncollectible accounts balance |$2,300
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| | | | |
| | |Net accounts receivable ($25,700 - $2,300) |$23,400 |
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| |(c) |Accounts Receivables |$84,000 |
| | |Allowance for Uncollectible accounts balance | |
| | |($25,0000 X .03 plus $300) |$7,800 |
| | | | |
| | |Net Accounts Receivables |$76,200 |
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| |(d) |Accounts Receivables |$83,000 |
| | |Allowance for Uncollectible accounts balance | |
| | |($25,0000 X .03 less $400) |$7,100 |
| | | | |
| | |Net Accounts Receivables |$75,900 |
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Question 2

On October 1, 2005, Mexican Hat Enterprises issued a $15,000, 6% note due September 30, 2006, to Jenson Corporation. Record entries for the above transactions.

(a) Identify the maker and the payee? Maker of the Note is Jenson Corporation Payee of the Note is Mexican Hat Enterprises

(b) Compute the maturity value of the note? Maturity value of the note: Principal plus Interest = $15,000 + ($15,000 X .06) = $15,900

(c) Show the journal entries required to record the December 31 interest adjustment for both the maker and the payee?

Mexican Hat Enterprises

Date Description Dr Cr 31/12/2005 Interest receivable ($15,000 X .06 X 3/12) $225 Interest Revenue $225

Jenson Corporation

Date Description Dr Cr 31/12/2005 Interest Expense $225 Interest Payable $225