1. Janway sells softball equipment. On November 14, they shipped $1,000 worth of softball uniforms to Chris Middle School, terms 2/10, n/30. On November 21, they received an order from Douglas High School for $600 worth of custom printed bats to be produced in December. On November 30, Chris Middle School returned $100 of defective merchandise. Janway has received no payments from either school as of month-end. What amount will be recognized as net accounts receivable on the Balance Sheet as of November 30?

2. Risen Company receives a $5,000, 3-month, 8% promissory note from Dodd Company in settlement of an open accounts receivable. What entry will Risen Company make upon receiving the note?

3. Gudenas Co., makes a credit card sale to a customer for $600. The credit card sale has a grace period of 30 days and then an interest charge of 18% per year or 1.5% per month is added to the balance. If the unpaid balance on the above sale is $360 at the end of the grace period, the interest charge is

4. The entry to record the dishonor of a note receivable assuming the payee expects eventual collection includes a debit to

a. Notes Receivable.

b. Cash.

c. Allowance for Doubtful Accounts.

d. Accounts Receivable.

5. Which of the following statements concerning receivables is incorrect?

a. Notes receivables are often listed last under receivables.

b. The contingent liability from selling notes receivable should be disclosed.

c. Both the gross amount of receivables and the allowance for doubtful accounts should be reported.

d. Interest revenue and gain on sale of notes receivable are shown under other revenues and gains.

6.

On December 31, 2016, House Co. reported the following information on its balance sheet.

Accounts receivable $960,000

Less: Allowance for doubtful accounts 80,000

During 2017, the company had the following transactions related to receivables.

1. Sales on account $3,700,000

2. Sales returns and allowances 50,000

3. Collections of accounts receivable 2,810,000

4. Write-offs of accounts receivable deemed uncollectible 90,000

5. Recovery of bad debts previously written off as uncollectible 29,000

Instructions

(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.

(b) Enter the January 1, 2017, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances.

(c) Prepare the journal entry to record bad debt expense for 2017, assuming that AN aging of accounts receivable indicates that expected bad debts are $115,000.

(d) Compute the accounts receivable turnover for 2017 assuming the expected bad debt information provided in (c).