PART IV $$ RECEIVABLES

A$.$ ACCOUNTS RECEIVABLE$$UNCOLLECTIBLE ACCOUNTS

Instructions: Present the journal entries specified below; show supporting calculations.

The trial balance of Vesnia Company at December $31,2001$ includes the following:

Debits Credits

Accounts Receivable $100,000$

Allowance for Doubtful Accounts $500$

Sales $($all on credit$)800,000$

Sales Returns and Allowances $60,000$

$(1)$ If Vesnia uses the aging method and estimates that $$7,000$ of receivables will be uncollectible, prepare the adjusting entry.

$(2)$ If Vesnia estimates uncollectibles at $1\%$ of net credit sales, prepare the appropriate adjusting entry.

$(3)$ Assume that on February $10,2001$ the specific account of Nick James with a balance of $$400,$ is deemed uncollectible. Record the write$-$off.

$(4)$ Assume that on May $12,2001$ James pays one$-$half of the above balance in full and is expected to pay the remainder within $30$ days. Record the appropriate entries.

B$.$ NOTES RECEIVABLE

Instructions: Prepare journal entries to record the following events:

July $1$ Stone Company received an $8\%,4-$month $$6,000$ note dated July $1$ from a customer on account.

Nov. $1$ The note is honoured and no interest has been accrued.

Nov. $1$ Assume instead that the note is dishonoured by its maker and there is hope of future collection.