3. BAT4M Unit 2 Activity 3 Assignment 1 - Accounting for Current Assets Record the following transactions in the spreadsheet template provided for this assignment 1. On May 1, 2015, Ahmed & Ahmed Dental Office had five patients who paid with different forms of payment. They use a revenue account called Dental Service Fees. Assume there is no sales tax. Record the following transactions in the general journal: a) A patient pays $70 cash for a regular check-up. b) A patient pays $125 with a ScotiaBank Visa card. ScotiaBank charges merchants a 4% service fee. c) A patient pays $225 for two fillings with a debit card. The bank charges merchants 15 cents per transaction. d) Sarah Smithson promises to pay $150 for dental services at the end of the month. e) A patient pays for $150 in services with an American Express card. The service fee that American Express charges merchants is 5%. 2. Rodriguez Carpentry accepts a six month, 8% promissory note from James Matheson on June 1 to settle a $14.000 outstanding account receivable. Record the following transactions in the general journal: a) The issuing of the note on June 1. b) Full payment of the note on December 1. C) Assume the note is dishonoured on December 1. On February 1, 2015, Samson Design writes off $2,500 of its accounts receivable as bad debts. a. Using the direct write-off method, record this transaction b. Which GAAP is (are) violated when the direct write-off method is used? Explain your answer. In 2015, Decorators Unlimited had net credit sales totaling $1,200,000. Based on past years, 2.5% of credit sales are estimated to be uncollectible. The balance in the Allowance for Doubtful Accounts account is $12,000. Record the journal entry to adjust for the estimated bad debts on December 31, 2015 assuming Decorators uses the income statement method. On February 1, 2016, the account receivable for B. Stinson of $3,000 is deemed uncollectible. Record the journal entry to write off this account. On July 15, 2016, Decorators Unlimited receives a cheque for $3,000 in full payment from B. Stinson for the account previously written off on Feb 1. Record both the recovery and the payment 5. The Chowdhury Landscaping Company uses the balance sheet method to determine bad debts. The ageing schedule at December 31, 2015 is: Number of Days Outstanding Total 31-60 61-90 90-120 > 120 Accounts Receivable 20.000 5,000 6,000 6,000 39.500 Estimated % Uncollectible 3% 25% Estimated Bad Debts Calculate the total estimated bad debts. If the balance in the Allowance for Doubtful Accounts account is $2,000, record the journal entry to adjust for the bad debts at December 31, 2015. 4. a. b. C. 0-30 2 500 2% 6% 12% a. b. General Journal Page Pantip 24 41 ten AL PI Question chart and found on the JOURNAL ENTRIES AGEING FOR QUES... Sheet3 Question 5. (a) Total Ageing of Accounts Receivable Number of Days Outstanding 0-30 31-60 61-90 90-120 Over 120 20,000 5,000 6.000 2.500 6,000 2% 3% 6% 12% 25% Accounts Receivable Estimated % Uncollectable Estimated Bad Debts 1 2 3 5 6 8 9 0 2 3 5 6 7 8 0 3 4 5 6 7 8 0 1 2 3 5 6 7 8 0 1 JOURNAL ENTRIES AGEING FOR QUES.. Sheet3
