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29 Mar. Apr. May 30 28 29 Received a $50,400, 60-day, 6% note dated March 29 from Karie Platt on account. Received a $46,200, 60-day, 5% note dated April 30 from Jon Kelly on account. The note dated March 29 from Karie Platt is dishonored, and the customer's account is charged for the note, including interest. The note dated April 30 from Jon Kelly is dishonored, and the customer's account is charged for the note, including interest. Cash is received for the amount due on the dishonored note dated March 29 plus interest for 90 days at 5% on the total amount debited to Karie Platt on May 28 Wrote off against the allowance account the amount charged to Jon Kelly on June 29 for the dishonored note dated April 30. Aug 26 Oct. 22 Journalize the above transactions in the accounts of Missouri Gaming Co., which operates a riverboat casino. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Journal .. Shaded cells have feedback. X DATE DESCRIPTION POST. REF. CREDIT LIABILITIES EQUITY Mar. 29 DEBIT 50,400.00 ASSETS 1 Notes Receivable Accounts Receivable-Karie Platt Notes Receivable 50,400.00 Apr. 30 46,200.00 Accounts Receivable-Jon Kelly 46,200.00 May 28 Accounts Receivable-Karie Platt 50,904.00 Notes Receivable 50,400.00 504.00 Interest Revenue Jun. 29 Accounts Receivable-Jon Kelly 46,585.00 Notes Receivable 46,200.00 385.00 Interest Revenue Aug. 26 51,030.00 Cash Accounts Receivable-Karie Platt 50,400.00 Interest Revenue 630.00 Allowance for Doubtful Accounts 46,200.00 Accounts Receivable-Jon Kelly 46,200.00 The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer sells and installs home and business security systems. Jan. 3 Feb. 10 Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Sold merchandise on account to Bradford & Co., $24,000. The cost of the goods sold was $14,400. 13 Sold merchandise on account to Dry Creek Co., $60,000. The cost of goods sold was $54,000. Mar. 12 Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account. Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account. 14 Apr. 3 Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) Received from Bradford & Co. the amount due on the note of March 12. May 11 13 Dry Creek Co. dishonored its note dated March 14. July 12 Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Received from Trina Gelhaus the amount due on her note of April 3. Aug. 1 Oct. 5 Sold merchandise on account, terms 2/10, n/30, to Halloran Co., $13,500. Record the sale net of the 2% discount. The cost of goods sold was $8,100. 15 Received from Halloran Co. the amount of the invoice of October 5, less 2% discount. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Assume this is a year in which February has 28 Effect of Doubtful Accounts on Net Income During its first year of operations, Mack's Plumbing Supply Co. had sales of $340,000, wrote off $5,000 of accounts as uncollectible using the direct write-off method, and reported net income of $37,400. Assume that during the second year of operations Mack's Plumbing Supply Co. had sales of $408,000, wrote off $6,000 of accounts as uncollectible using the direct write-off method, and reported net income of $40,800. a. Determine what net income would have been in the second year if the allowance method (using 1.5% of sales) had been used in both the first and second years. b. Determine what the balance of the allowance for doubtful accounts would have been at the end of the second year if the allowance method had been used in both the first and second years. If required, use the minus sign to indicate a "debit" balance
