Question
The trial balance before adjustment for Phil Collins Company shows the following balances. Dr. Cr. Accounts Receivable $86,500 Allowance for Doubtful Accounts 1,960 Sales Revenue
The trial balance before adjustment for Phil Collins Company shows the following balances.
Dr. | Cr. | |||
Accounts Receivable | $86,500 | |||
Allowance for Doubtful Accounts | 1,960 | |||
Sales Revenue | $472,000 |
Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.)
1. | To obtain additional cash, Collins factors without recourse $27,800 of accounts receivable with Stills Finance. The finance charge is 11% of the amount factored. | |
2. | To obtain a 1-year loan of $62,700, Collins assigns $69,200 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. | |
3. | The company wants to maintain Allowance for Doubtful Accounts at 5% of gross accounts receivable. | |
4. | The company wishes to increase the allowance account by 1.8% of net sales. |
(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
1.
Account? | Debit | Credit |
Account? | Debit | Credit |
Account? | Debit | Credit |
2.
Account? | Debit | Credit |
Account? | Debit | Credit |
Account? | Debit | Credit |
3.
Account? | Debit | Credit |
Account? | Debit | Credit |
4.
Account? | Debit | Credit |
Account? | Debit | Credit |
List of possible accounts for each entry:
Accounts Payable Accounts Receivable Advertising Expense Allowance for Doubtful Accounts Bad Debt Expense Cash Cash Over and Short Due from Factor Due to Customer Discount on Notes Payable Discount on Notes Receivable Freight-In Freight-Out Gain on Disposal of Land Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Land Loss on Sale of Receivables Miscellaneous Expenses No Entry Notes Payable Notes Receivable Office Expense Owner's Drawings Petty Cash Postage Expense Purchase Discounts Recourse Liability Sales Discounts Sales Discounts Forfeited Sales Revenue Service Revenue Supplies Supplies Expenses Unearned Sales Revenue
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