1) Donaldson Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the following transactions occurred.

Oct. 15 Sold $30,000 of accounts receivable to Fast Factors, Inc. who assesses a 3% finance charge.

25 Made sales of $900 on Visa credit cards. The credit card service charge is 2%.

Instructions

Journalize the transactions.

2)

Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X).

_____ 1. Computer installation cost

_____ 2. Driveway cost

_____ 3. Architects fee

_____ 4. Surveying costs

_____ 5. Grading costs

_____ 6. Cost of lighting for parking lot

_____ 7. Insurance while in transit and freight on computer purchased

_____ 8. Material and labor costs incurred to construct factory

_____ 9. Cost of tearing down a warehouse on land just purchased

_____10. Utility cost during first year