1)

Levine Company uses the perpetual inventory system.

Apr.		8		Sold merchandise for $3,400 (that had cost $2,513) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee.
		12		Sold merchandise for $4,400 (that had cost $2,851) and accepted the customer's Continental Card. Continental charges a 2.5% fee.

Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)

• Sold merchandise for $3,400 and accepted the customers Suntrust Bank Card. Suntrust charges a 4% fee.
• Record the cost of goods sold, $2,513.
• Sold merchandise for $4,400 and accepted the customers Continental Card. Continental charges a 2.5% fee.
• Record the cost of goods sold, $2,851.

2)

Z-Mart uses the perpetual inventory system and has its own credit card. Z-Mart charges a per-month interest fee for any unpaid balance on its store credit card at each month-end.

Apr.		30		Z-Mart sold merchandise for $3,000 (that had cost $1,650) and accepted the customers Z-Mart store credit card.
May		31		Z-Mart recorded $5 of interest earned from its store credit card as of this month-end.

Prepare journal entries to record the above credit card transactions of Z-Mart.

• Z-Mart sold merchandise for $3,000 and accepted the customers Z-Mart store credit card.
• Record the cost of good sold $1,650.
• Z-Mart recorded $5 of interest earned from its store credit card as of this month-end.

3) At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $665,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $333 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions.

• Record the estimated bad debts expense.
• Wrote off P. Park's account as uncollectible.
• Reinstated Park's previously written off account.
• Record the cash received on account.

4)

Daley Company prepared the following aging of receivables analysis at December 31.

				Days Past Due
	Total			0			1 to 30				31 to 60				61 to 90				Over 90
Accounts receivable	$	580,000		$	398,000			$	92,000			$	38,000			$	20,000			$	32,000
Percent uncollectible					3	%			4	%			7	%			9	%			12	%

a. Complete a table to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $3,800 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $300 debit.

5)

Daley Company prepared the following aging of receivables analysis at December 31.

				Days Past Due
	Total			0			1 to 30				31 to 60				61 to 90				Over 90
Accounts receivable	$	580,000		$	398,000			$	92,000			$	38,000			$	20,000			$	32,000
Percent uncollectible					3	%			4	%			7	%			9	%			12	%

a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,200 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,200 debit.