1. A receivable is reduced when cash is collected, a sales discount is taken, or the merchandise is returned by the customer. Prepare the following journal entries:

a)On July 5, Montreal returns merchandise worth $1,000 to Ottawa Co. The cost of inventory is $600. Jul. 5

b)On July 11, Ottawa receives payment from Montreal Company for the balance due Jul. 11

2. If a customer does not pay in full within the credit term period (usually 30 days), an interest (financing) charge may be added to the balance due Seller recognizes interest revenue and increases the account receivable balance owed by the customer. Some retailers issue their own credit cards.

a)Assume that you use your JCPenney Company credit card to purchase clothing with a sales price of $300 on June 15. JCPenney records:

b)If you still owe the $300 from the June 15 transaction at the end of the month, JCPenney charges interest of 1.5% per month on the balance due. JCPenney makes an adjusting entry to record interest revenue on June 30 as follows:

3. Non-cumulative Preferred Dividends MasterMind Corporation has 2,000 shares of 6%, $100 par value preferred stock outstanding at December 31, 2022. At December 31, 2022, the company declared a $60,000 cash dividend. Determine the dividend paid to preferred shareholders and common shareholders if preferred share is noncumulative, and the company did not pay a dividend in each of the two previous years. Past unpaid dividends do not have to be paid Preferred stockholders= Common stockholders =