Comprehensive in class problems Cash & Receivables 101220

1. Ace Company purchases $1,400 of merchandise from Zitco on December 16. Zitco accepts Aces $1,400, 90 day 12% note as payment. Zitcos accounting period ends on Dec 31^st
   1. prepare entries for Zitco on December 16 and 31^st
   2. prepare entries for Zitco on March 16^th if Ace dishonors the note
   3. Instead, prepare Zitcos March 16^th entry if Ace honors the note
   4. Assume facts in b (dishonors note) and on March 31^st Zitco wirtes off the receivable from Ace company assuming Zitco uses the allowance method.

1. A retailer uses the allowance method. Record the following transactions:

Dec 31: The retailer estimates $3,000 of its accounts receivable are uncollectible at year-end

Feb 14: The retailer determines that it cannot collect $400 of its accounts receivable from ZZZ Co.

Apr 1: ZZZ Company unexpectedly pays its account in full to the retailer, which then records its recovery of this bad debt.