Mastery Problem Receivables Fan Tastic Sports Gear Inc You have just been hired as the accountant for Fan Tastic Sports Gear Inc , a wholesaler of sporting goods and apparel The previous accountant left abruptly in late December, 20Y7, and an accounting intern has been drafting the journal entries since January You are examining the accounting records before finalizing the journal entries for the first quarter of 20Y8 The following journal shows some of the accounts receivable transactions that you are reviewing Journal Date Description Debit Credit Jan 17 Sales 9,800 Bad Debt Expense 9,800 17 Bad Debt Expense 9,800 Accounts Receivable CJs Sports Corp 9,800 21 Cash 10,800 Bad Debt Expense 2,100 Accounts Receivable Four Seasons Sportswear Co 12,900 Feb 15 Accounts Receivable Healthy Running Inc 3,000 Bad Debt Expense 500 Sales 3,500 Mar 4 Accounts Receivable Four Seasons Sportswear Co 2,100 Bad Debt Expense 2,100 4 Cash 2,100 Bad Debt Expense 2,100 13 Cash 5,540 Accounts Receivable Barbs Best Gear 5,540 31 Bad Debt Expense 21,070 Accounts Receivable Healthy Running Inc 5,350 Accounts Receivable The Locker Room 4,100 Accounts Receivable CJs Sports Corp 2,780 Accounts Receivable Get Your Gear Inc 7,050 Accounts Receivable Ready 2 Go 1,790 2 Finalize the journal entries shown on the Fan Tastic Sports Gear Inc panel and make any necessary changes If an amount box does not require an entry, leave it blank Jan 17 Allowance for Doubtful AccountsAccounts Receivable Healthy Running Inc CashSalesInterest Expenses Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc CashSalesInterest Expenses Jan 21 Accounts Receivable Ready 2 GoAccounts Receivable Healthy Running Inc CashSalesInterest Expenses Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Allowance for Doubtful AccountsSalesInterest Expenses Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Accounts Receivable Four Seasons Sportswear Co SalesInterest Expenses Feb 15 Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Accounts Receivable The Locker RoomSalesInterest Expenses Accounts Receivable CJ's Sports Corp Accounts Receivable Barb's Best GearAccounts Receivable The Locker RoomSalesInterest Expenses Mar 4 Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Accounts Receivable The Locker RoomAccounts Receivable Four Seasons Sportswear Co Interest Expenses Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Allowance for Doubtful AccountsSalesInterest Expenses Mar 4 Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Accounts Receivable The Locker RoomCashInterest Expenses Accounts Receivable CJ's Sports Corp Accounts Receivable Healthy Running Inc Accounts Receivable The Locker RoomAccounts Receivable Four Seasons Sportswear Co Interest Expenses Mar 13 Allowance for Doubtful AccountsAccounts Receivable Healthy Running Inc Accounts Receivable The Locker RoomCashSales Allowance for Doubtful AccountsAccounts Receivable Healthy Running Inc Accounts Receivable The Locker RoomAccounts Receivable Barb's Best GearSales Mar 31 Allowance for Doubtful AccountsCost of Goods SoldBonds PayableSalesInterest Expenses Accounts Receivable Healthy Running Inc Cost of Goods SoldBonds PayableSalesInterest Expenses Accounts Receivable The Locker RoomGain on Redemption of BondsInterest RevenueInterest ExpensesSales Accounts Receivable CJ's Sports Corp Bonds PayableDiscount on Bonds PayableSalesInterest Expenses Accounts Receivable Get Your Gear Inc Cost of Goods SoldNotes PayableSalesInterest Expenses Accounts Receivable Ready 2 GoCost of Goods SoldNotes PayableSalesInterest Expenses Question Content Area Note Receivable In the trial balance for March, you see that Notes Receivable Fast Feet Co has a negative balance of $195, which would seem to indicate that Fast Feet paid too much Looking back through the journal entries for March, you find that on March 19 the accounting intern recorded receipt of $9,945 in payment of this note receivable Further investigation reveals that on November 19, 20Y7, this note receivable was received from Fast Feet Co for $9,750 You can find no additional information about this note in the accounting records Assume a 360 day year Using the preceding information, compute the term and the interest rate of the note receivable from Fast Feet 1 Term of the note fill in the blank 812fb6fe8f9efd0 1 days 2 Interest rate of the note fill in the blank 812fb6fe8f9efd0 2 Question Content Area 3 Journalize the entry needed to record information about the note receivable from Fast Feet for the year 20Y7 Assume that the entry on November 19, 20Y7 is correct If an amount box does not require an entry, leave it blank Round all amounts to the nearest dollar Dec 31 CashInterest ReceivableInterest RevenueNotes Receivable Fast Feet Co Sales CashDividendsInterest RevenueNotes Receivable Fast Feet Co Sales Question Content Area 4 Journalize the entry needed to record collection of the note at maturity on March 19, 20Y8 Assume that the entry on November 19, 20Y7 is correct If an amount box does not require an entry, leave it blank Round all amounts to the nearest dollar Mar 19 Bonds PayableCashPremium on Bonds PayableMiscellaneous ExpenseSales Bonds PayableMiscellaneous ExpenseNotes Receivable Fast Feet Co Premium on Bonds PayableSales DividendsDiscount on Bonds PayableInterest ReceivableNotes PayableSales DividendsDiscount on Bonds PayableInterest RevenueNotes PayableSales Question Content Area Final Questions Fan Tastic Sports Gear Inc recorded $3,100,000 of sales last year and projects sales to increase by $350,000 in the current year Last year, 90 of sales were on account, with over 400 customer accounts Bad debt expense was $26,187 1 Assume that Fan Tastic Sports Gear Inc used the allowance method last year, and the allowance account at the end of the year had a debit balance of $2,190 The company estimated uncollectible accounts expense using the percent of credit sales method and expected 0 75 of credit sales to be uncollectible What is the amount of the adjusting entry to provide for doubtful accounts on December 31 Round all computations to the nearest dollar $fill in the blank 611df5046f97fac 1 2 How much higher (lower) would Fan Tastic Sports Gear Inc s net income have been under the allowance method assumption previously shown in (1) than under the direct write off method (Enter 0 if there is no change ) LowerHigher by $fill in the blank 611df5046f97fac 3 3 Using the allowance method, the net realizable value of the receivables would appear on which financial statement income statementbalance sheetschedule of accounts receivable trial balance

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Mastery Problem: Receivables Fan-Tastic Sports Gear Inc. You have just been hired as the accountant for Fan-Tastic Sports Gear Inc., a wholesaler of sporting goods

Mastery Problem: Receivables

Fan-Tastic Sports Gear Inc.

You have just been hired as the accountant for Fan-Tastic Sports Gear Inc., a wholesaler of sporting goods and apparel. The previous accountant left abruptly in late December, 20Y7, and an accounting intern has been drafting the journal entries since January. You are examining the accounting records before finalizing the journal entries for the first quarter of 20Y8. The following journal shows some of the accounts receivable transactions that you are reviewing.

Journal
Date	Description	Debit	Credit
Jan. 17	Sales	9,800
	Bad Debt Expense		9,800

17	Bad Debt Expense	9,800
	Accounts Receivable-CJs Sports Corp.		9,800

21	Cash	10,800
	Bad Debt Expense	2,100
	Accounts Receivable-Four Seasons Sportswear Co.		12,900

Feb. 15	Accounts Receivable-Healthy Running Inc.	3,000
	Bad Debt Expense	500
	Sales		3,500

Mar. 4	Accounts Receivable-Four Seasons Sportswear Co.	2,100
	Bad Debt Expense		2,100

4	Cash	2,100
	Bad Debt Expense		2,100

13	Cash	5,540
	Accounts Receivable-Barbs Best Gear		5,540

31	Bad Debt Expense	21,070
	Accounts Receivable-Healthy Running Inc.		5,350
	Accounts Receivable-The Locker Room		4,100
	Accounts Receivable-CJs Sports Corp.		2,780
	Accounts Receivable-Get Your Gear Inc.		7,050
	Accounts Receivable-Ready-2-Go		1,790

2. Finalize the journal entries shown on the Fan-Tastic Sports Gear Inc. panel and make any necessary changes. If an amount box does not require an entry, leave it blank.

Jan. 17	Allowance for Doubtful AccountsAccounts Receivable-Healthy Running Inc.CashSalesInterest Expenses
	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.CashSalesInterest Expenses
Jan. 21	Accounts Receivable-Ready-2-GoAccounts Receivable-Healthy Running Inc.CashSalesInterest Expenses
	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Allowance for Doubtful AccountsSalesInterest Expenses
	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Accounts Receivable-Four Seasons Sportswear Co.SalesInterest Expenses
Feb. 15	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Accounts Receivable-The Locker RoomSalesInterest Expenses
	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Barb's Best GearAccounts Receivable-The Locker RoomSalesInterest Expenses
Mar. 4	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Accounts Receivable-The Locker RoomAccounts Receivable-Four Seasons Sportswear Co.Interest Expenses
	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Allowance for Doubtful AccountsSalesInterest Expenses
Mar. 4	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Accounts Receivable-The Locker RoomCashInterest Expenses
	Accounts Receivable-CJ's Sports Corp.Accounts Receivable-Healthy Running Inc.Accounts Receivable-The Locker RoomAccounts Receivable-Four Seasons Sportswear Co.Interest Expenses
Mar. 13	Allowance for Doubtful AccountsAccounts Receivable-Healthy Running Inc.Accounts Receivable-The Locker RoomCashSales
	Allowance for Doubtful AccountsAccounts Receivable-Healthy Running Inc.Accounts Receivable-The Locker RoomAccounts Receivable-Barb's Best GearSales
Mar. 31	Allowance for Doubtful AccountsCost of Goods SoldBonds PayableSalesInterest Expenses
	Accounts Receivable-Healthy Running Inc.Cost of Goods SoldBonds PayableSalesInterest Expenses
	Accounts Receivable-The Locker RoomGain on Redemption of BondsInterest RevenueInterest ExpensesSales
	Accounts Receivable-CJ's Sports Corp.Bonds PayableDiscount on Bonds PayableSalesInterest Expenses
	Accounts Receivable-Get Your Gear Inc.Cost of Goods SoldNotes PayableSalesInterest Expenses
	Accounts Receivable-Ready-2-GoCost of Goods SoldNotes PayableSalesInterest Expenses

Question Content Area

Note Receivable

In the trial balance for March, you see that Notes Receivable-Fast Feet Co. has a negative balance of $195, which would seem to indicate that Fast Feet paid too much. Looking back through the journal entries for March, you find that on March 19 the accounting intern recorded receipt of $9,945 in payment of this note receivable. Further investigation reveals that on November 19, 20Y7, this note receivable was received from Fast Feet Co. for $9,750. You can find no additional information about this note in the accounting records. Assume a 360 day year.

Using the preceding information, compute the term and the interest rate of the note receivable from Fast Feet.

1. Term of the note: fill in the blank 812fb6fe8f9efd0_1 days

2. Interest rate of the note: fill in the blank 812fb6fe8f9efd0_2 %

Question Content Area

3. Journalize the entry needed to record information about the note receivable from Fast Feet for the year 20Y7. Assume that the entry on November 19, 20Y7 is correct. If an amount box does not require an entry, leave it blank. Round all amounts to the nearest dollar.

Dec. 31	CashInterest ReceivableInterest RevenueNotes Receivable-Fast Feet Co.Sales
	CashDividendsInterest RevenueNotes Receivable-Fast Feet Co.Sales

Question Content Area

4. Journalize the entry needed to record collection of the note at maturity on March 19, 20Y8. Assume that the entry on November 19, 20Y7 is correct. If an amount box does not require an entry, leave it blank. Round all amounts to the nearest dollar.

Mar. 19	Bonds PayableCashPremium on Bonds PayableMiscellaneous ExpenseSales
	Bonds PayableMiscellaneous ExpenseNotes Receivable-Fast Feet Co.Premium on Bonds PayableSales
	DividendsDiscount on Bonds PayableInterest ReceivableNotes PayableSales
	DividendsDiscount on Bonds PayableInterest RevenueNotes PayableSales

Question Content Area

Final Questions

Fan-Tastic Sports Gear Inc. recorded $3,100,000 of sales last year and projects sales to increase by $350,000 in the current year. Last year, 90% of sales were on account, with over 400 customer accounts. Bad debt expense was $26,187.

1. Assume that Fan-Tastic Sports Gear Inc. used the allowance method last year, and the allowance account at the end of the year had a debit balance of $2,190. The company estimated uncollectible accounts expense using the percent of credit sales method and expected 0.75% of credit sales to be uncollectible. What is the amount of the adjusting entry to provide for doubtful accounts on December 31? Round all computations to the nearest dollar. $fill in the blank 611df5046f97fac_1

2. How much higher (lower) would Fan-Tastic Sports Gear Inc.s net income have been under the allowance method assumption previously shown in (1) than under the direct write-off method? (Enter 0 if there is no change.)

LowerHigher

by $fill in the blank 611df5046f97fac_3

3. Using the allowance method, the net realizable value of the receivables would appear on which financial statement?

income statementbalance sheetschedule of accounts receivable trial balance