1) Percy Partners had the following transactions:

Oct 31: Borrowed $10,000 cash from Susan Corp. Percy Gave Susan an 8-month note at 6% interest as its promise for payment.

Dec 1: Performed services for a customer. The Customer gave Percy a 6-month, $900 note at 12% interest.

Dec 31: (Percy's year-end) Accrued interest on both notes for the year-end financial statements (i.e., made the appropriate adjusting entries to record interest at December 31).

June 1: Received payment (including interest) from December 1 customer note.

June 30: Paid off note to Susan Corp., including interest.

Prepare all necessary journal entries for Percy Partners to record these transactions.

2) Branson Partners had an allowance for doubtful accounts of $160 on January 1. During the year, Branson wrote off $145 of accounts receivable and earned revenues of $5,000. At December 31, Bransons accounts receivable were $1,500. Branson estimates that there should be $170 of bad debt expense for the year.

a. Give Bransons journal entry to record all write-offs for the year.

b. Give Bransons journal entry to record bad debt expense for the year (December 31 adjusting entry).

c. What is the balance in Bransons allowance for doubtful accounts at December 31?

d. What is Bransons net accounts receivable at December 31?

3) Jennifer Group had an allowance for doubtful accounts of $80 on January 1. During the year, Jennifer wrote off $75 of accounts receivable and earned revenues of $2,200. At December 31, Jennifers accounts receivable were $700. Jennifer estimates that 4% of all revenues will result in bad debt expense.

a. Give Jennifers journal entry to record all write-offs for the year.

b. Give Jennifers journal entry to record bad debt expense for the year (December 31 adjusting entry).

c. What is the balance in Jennifers allowance for doubtful accounts at December 31?

d. What is Jennifers net accounts receivable at December 31?

4) Sanders Company had an allowance for doubtful accounts of $80 on January 1. During the year, Sanders wrote off $85 of accounts receivable and earned revenues of $2,200. At December 31, Sanders accounts receivable were $700. Sanders estimates that 10% of accounts receivable will eventually be uncollectible.

a. Give all of Sanders journal entry to record all write-offs for the year.

b. Give Sanders journal entry to record bad debt expense for the year (December 31 adjusting entry).

c. How much of the $700 of receivables does Sanders expect not to collect?

d. What is Sanders net accounts receivable at December 31?

5) Jackson Inc. had the following breakdown of accounts receivable at December 31:

Age of Accounts Amount Percentage Estimated Uncollectible

1-30 Days $12,000 1%

31-60 Days $4,000 4%

61-90 Days $3,600 10%

Over 90 Days $20,000 50%

At the end of the year, before adjustments, Jackson has a $25 credit in the allowance for doubtful accounts.

a) What is the balance in Jacksons allowance for doubtful accounts at December 31?

b) Give Jacksons journal entry to record bad debt expense for the year (December 31 adjusting entry).

c) What is Jacksons net accounts receivable at December 31?

6) Bangle Brothers purchased land 5 years ago for $80,000. It has received an offer from another company that wants to purchase the land for $200,000 ($50,000 cash, the remainder financed as a note). Bangles CEO is concerned about the impact this will have on the companys financial statements. Specifically, he does not want shareholders to see increased revenues, which might lead to unrealistic expectations for the next year.

a) If Bangle goes through with the sale, what journal entry would be recorded?

b) Address the CEOs concerns. Will revenue be impacted if the sale goes through? Why or why not?

7) The following information is from Carter Corp.s year-end financial statements.:

Cash $150

Accounts Receivable $175

Short-Term Investments $300

Prepaid Expenses $75

Land $1,000

Equipment $950

Accumulated Depreciation $625

Accounts Payable $275

Salaries Payable $25

Interest Payable $100

Long-Term Notes Payable $300

Long-Term Loans Payable $400

Total Revenues $2,500

a) Calculate Carters current ratio, quick (acid test) ratio, and days sales ratio for the year. (Last year Carters accounts receivables were $225.)

b) Last year, Carters current ratio was 2, Carters quick ratio was 1.4, and Carters days sales ratio was 31 days. Comment on whether these ratios have improved or worsened this year.