Accounts Receivable

Sales Revenue

Sales Returns and Allowances

Accounts Receivable

$1728$

Allowance for Doubtful AccountsInformation on Flounder Corp., which reports under ASPE, follows:

July $1$ Flounder Corp. sold to Pharoah Ltd$.$ merchandise having a sales price of $$8,200,$ terms $\frac{2}{10},\frac{n}{60}.$ Ignore cost of goods

sold entry.

$3$ Pharoah returned defective merchandise having a sales price of $$800.$ The merchandise was not saleable and was

scrapped.

$5$ Accounts receivable of $$19,200$ are factored with Concord Corp. without recourse at a financing charge of $9\%.$ Cash is

received for the proceeds and collections are handled by the finance company.

$9$ Specific accounts receivable of $$16,800$ are pledged to Landon Credit Corp. as security for a loan of $$10,600$ at a

finance charge of $3\%$ of the loan amount plus $9\%$ interest on the outstanding balance. Flounder will continue to make

the collections. All the accounts receivable pledged are past the discount period and were originally subject to a $2\%$

discount.

Dec. $29$ Pharoah notifies Flounder that it is bankrupt and will be able to pay only $10\%$ of its account. Prepare the entry to write

off the uncollectible balance using the allowance method.

$($a$)$

Prepare all necessary journal entries on Flounder's books. $($Credit account titles are automatically indented when the amount is entered. Do

not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Record journal entries in the

order presented in the problem. List all debit entries before credit entries.$)$