Prepare journal entries for the following transactions. Information about your new contracts and related transactions is provided below 1. Your local natural foods store has decided to purchase 100 cases of your lemonade per month for $2.000, starting this June. You deliver the cases on the 7th of each month, but the store pays you within 30 days. Your cost to produce these cases is $800. Record the sale and the cost of goods sold in separate entries. 2. A local after-school program has decided to purchase 50 cases of your lemonade per month for $1.000, starting this June. You deliver the cases on the 10th of each month. The store is contractually obligated to pay you by the 30th of each month, but you have offered them a 2% discount if they pay by the 20th. In June, the company paid you in full on the 19th. Your cost to produce these cases is $400. Record the sale and the cost of goods sold in separate entries 3. On June 11th, a carnival purchased 20 cases of your lemonade for $180 with the promise to pay within 30 days. Your cost to produce these cases was $80. Record the entry on June 11th. Record the sale and the cost of goods sold in separate entries 4. The local chapter of Red Cross purchased 400 cases of your lemonade for $5,000 on June 1st. Your cost to produce these cases is $2,000. They would like to set up the payment terms as a note receivable with the amount due on September 1st and carrying an interest rate of 6% You agree to these terms. Prepare the journal entry on June 1st and record interest income accrued as of June 30th 5. On June 30th, you are ready to adjust the books for the month and review your receivables to assess the uncollectible amounts. Of your Accounts Receivable, you determine that 25% is uncollectible. Prepare the journal entry to record bad debt expense for the month of June. Assume that beginning balance of Accounts Receivable is $820. Also assume that beginning balance of Allowance for Doubtful Accounts is $10. (Note that you will need to first post all the above entries into the T-Accounts; calculate the ending balance of Accounts Receivable, then complete the Allowance for Doubtful Accounts T-Account to finally determine the amount of bad debt expense which is the difference between the beginning and ending balances of the Allowance for Doubtful Accounts)
Prepare journal entries for the following transactions. Information about your new contracts and related transactions is provided below 1. Your local natural foods store has decided to purchase 100 cases of your lemonade per month for $2.000, starting this June. You deliver the cases on the 7th of each month, but the store pays you within 30 days. Your cost to produce these cases is $800. Record the sale and the cost of goods sold in separate entries. 2. A local after-school program has decided to purchase 50 cases of your lemonade per month for $1.000, starting this June. You deliver the cases on the 10th of each month. The store is contractually obligated to pay you by the 30th of each month, but you have offered them a 2% discount if they pay by the 20th. In June, the company paid you in full on the 19th. Your cost to produce these cases is $400. Record the sale and the cost of goods sold in separate entries 3. On June 11th, a carnival purchased 20 cases of your lemonade for $180 with the promise to pay within 30 days. Your cost to produce these cases was $80. Record the entry on June 11th. Record the sale and the cost of goods sold in separate entries 4. The local chapter of Red Cross purchased 400 cases of your lemonade for $5,000 on June 1st. Your cost to produce these cases is $2,000. They would like to set up the payment terms as a note receivable with the amount due on September 1st and carrying an interest rate of 6% You agree to these terms. Prepare the journal entry on June 1st and record interest income accrued as of June 30th 5. On June 30th, you are ready to adjust the books for the month and review your receivables to assess the uncollectible amounts. Of your Accounts Receivable, you determine that 25% is uncollectible. Prepare the journal entry to record bad debt expense for the month of June. Assume that beginning balance of Accounts Receivable is $820. Also assume that beginning balance of Allowance for Doubtful Accounts is $10. (Note that you will need to first post all the above entries into the T-Accounts; calculate the ending balance of Accounts Receivable, then complete the Allowance for Doubtful Accounts T-Account to finally determine the amount of bad debt expense which is the difference between the beginning and ending balances of the Allowance for Doubtful Accounts)
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 3Q: On January 1, a flower shop contracts with customers to provide flowers for their wedding on June 2....
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Transcribed Image Text:Prepare journal entries for the following transactions. Information about your new contracts and related transactions is provided below.
1. Your local natural foods store has decided to purchase 100 cases of your lemonade per month for $2,000, starting this June. You deliver the cases on the 7th of each month, but the store pays you within 30
days. Your cost to produce these cases is $800. Record the sale and the cost of goods sold in separate entries.
2. A local after-school program has decided to purchase 50 cases of your lemonade per month for $1.000, starting this June. You deliver the cases on the 10th of each month. The store is contractually obligated
to pay you by the 30th of each month, but you have offered them a 2% discount if they pay by the 20th. In June, the company paid you in full on the 19th. Your cost to produce these cases is $400. Record
the sale and the cost of goods sold in separate entries.
3. On June 11th, a carnival purchased 20 cases of your lemonade for $180 with the promise to pay within 30 days. Your cost to produce these cases was 580. Record the entry on June 11th Record the sale
and the cost of goods sold in separate entries.
4. The local chapter of Red Cross purchased 400 cases of your lemonade for $5,000 on June 1st Your cost to produce these cases is $2,000. They would like to set up the payment terms as a note receivable
with the amount due on September 1st and carrying an interest rate of 6%. You agree to these terms. Prepare the journal entry on June 1st and record interest income accrued as of June 30th.
5. On June 30th, you are ready to adjust the books for the month and review your receivables to assess the uncollectible amounts. Of your Accounts Receivable, you determine that 2% is uncollectible. Prepare
the journal entry to record bad debt expense for the month of June. Assume that beginning balance of Accounts Receivable is $820. Also assume that beginning balance of Allowance for Doubtful Accounts is
$10. (Note that you will need to first post all the above entries into the T-Accounts; calculate the ending balance of Accounts Receivable; then complete the Allowance for Doubtful Accounts T-Account to
finally determine the amount of bad debt expense which is the difference between the beginning and ending balances of the Allowance for Doubtful Accounts)
June 7 Record sale of 100 cases to the natural food store. Cost of
Goods Sold will be recorded in the next entry
June 7 Record Cost of Goods Sold for the sale to the natural lood
store
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June 10 Record sale of 50 cases to local after school program Cost
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June 10 Record Cost of Goods sold for the sale to the local after
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