Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 2, Problem 16SEB
To determine
Identify the value of account payable and account receivable recorded by Company R.
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Journalize the entries for the following transactions. Refer to the Chart of Accounts for the exact wording of account titles. (Note: The company uses a clearinghouse to take care of all banks as well as non-bank credit cards used by its customers.)
A.
Sold merchandise for cash, $25,000. The cost of the goods sold was $17,500.
B.
Sold merchandise on account, $98,000. The cost of the goods sold was $58,800.
C.
Sold merchandise to customers who used MasterCard and VISA, $475,000. The cost of the goods sold was $280,000.
D.
Sold merchandise to customers who used American Express, $63,000. The cost of the goods sold was $39,000.
E.
Received an invoice from National Clearing House Credit Co. for $13,450, representing a service fee paid for processing MasterCard, VISA, and American Express sales.
CHART OF ACCOUNTS
General Ledger
ASSETS
110
Cash
120
Accounts Receivable
125
Notes Receivable
130
Inventory
131
Estimated Returns Inventory
140…
Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. )
A.
Sold merchandise for cash, $33,900. The cost of the goods sold was $18,306.
B.
Sold merchandise on account, $262,400. The cost of the merchandise sold was $141,696.
C.
Sold merchandise to customers who used MasterCard and VISA, $169,100. The cost of the merchandise sold was $91,314.
D.
Sold merchandise to customers who used American Express, $72,500. The cost of the merchandise sold was $39,150.
E.
Received an invoice from National Clearing House Credit Co. for $8,570, representing a service fee paid for processing MasterCard, VISA, and American Express sales.
Presented below are three receivables transactions. Indicate whether these receivables are reported as accounts receivable, notes
receivable, or other receivables on a balance sheet.
a.
Sold merchandise on account for $64,000 to a customer.
Accounts receivable
b.
Received a promissory note of $57,000 for services performed.
Notes receivable
Other receivables
C.
Advanced $10,000 to an employee.
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1YTCh. 2 - Prob. 2YTCh. 2 - Is prepaid insurance an expense or an asset?...Ch. 2 - Prob. 4YTCh. 2 - Give an example of the matching principle from the...Ch. 2 - What is the difference between cash basis and...Ch. 2 - Prob. 7YTCh. 2 - What is GAAP? What is IFRS?Ch. 2 - Prob. 2QCh. 2 - Prob. 3Q
Ch. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - What are the four basic financial statements?Ch. 2 - Which financial statement pertains to a single...Ch. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - What does recognize revenue mean in accounting?Ch. 2 - Prob. 14QCh. 2 - What is an accrual? What is a deferral?Ch. 2 - Must a company collect the money from a sale...Ch. 2 - What is the cost of goods sold?Ch. 2 - Explain the difference between cash basis...Ch. 2 - Prob. 19QCh. 2 - Prob. 20QCh. 2 - Prob. 21QCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Prob. 7MCQCh. 2 - Prob. 8MCQCh. 2 - Prob. 9MCQCh. 2 - Prob. 10MCQCh. 2 - Elements of the financial statements. (LO 3). For...Ch. 2 - Prob. 2SEACh. 2 - Prob. 3SEACh. 2 - Prob. 4SEACh. 2 - Prob. 5SEACh. 2 - Prob. 6SEACh. 2 - Cash versus credit sales. (LO 3, 4). Company A had...Ch. 2 - Prob. 8SEACh. 2 - Prob. 9SEACh. 2 - Prob. 10SEACh. 2 - Prob. 11SEBCh. 2 - Prob. 12SEBCh. 2 - Prob. 13SEBCh. 2 - Prob. 14SEBCh. 2 - Prob. 15SEBCh. 2 - Prob. 16SEBCh. 2 - Prob. 17SEBCh. 2 - Prob. 18SEBCh. 2 - Prob. 19SEBCh. 2 - Prob. 20SEBCh. 2 - Prob. 21EACh. 2 - Prob. 22EACh. 2 - Prob. 23EACh. 2 - Balance sheet and income statement transactions....Ch. 2 - Prob. 25EACh. 2 - Prob. 26EACh. 2 - Prob. 27EACh. 2 - Prob. 28EACh. 2 - Elements of the financial statements. (LO 3). The...Ch. 2 - Prob. 30EBCh. 2 - Elements of the financial statements. (LO 3)....Ch. 2 - Prob. 32EBCh. 2 - Prob. 33EBCh. 2 - Prob. 34EBCh. 2 - Prob. 35EBCh. 2 - Current ratio. (LO 5). The following data was...Ch. 2 - Prob. 37PACh. 2 - Prob. 38PACh. 2 - Prob. 39PACh. 2 - Prob. 40PACh. 2 - Prob. 41PACh. 2 - Prob. 42PBCh. 2 - Prob. 43PBCh. 2 - Prob. 44PBCh. 2 - Prob. 45PBCh. 2 - Prob. 46PBCh. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSA
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- Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. ) A. Sold merchandise for cash, $27,700. The cost of the goods sold was $14,681. B. Sold merchandise on account, $250,000. The cost of the merchandise sold was $132,500. C. Sold merchandise to customers who used MasterCard and VISA, $161,700. The cost of the merchandise sold was $85,701. D. Sold merchandise to customers who used American Express, $72,000. The cost of the merchandise sold was $38,160. E. Received an invoice from National Clearing House Credit Co. for $8,610, representing a service fee paid for processing MasterCard, VISA, and American Express sales. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 131 Estimated Returns…arrow_forwardPresented below are several receivables transactions. For each transaction, indicate whether the receivables should be reported as accounts receivable, notes receivable, or other receivables on a statement of financial position. (a) Received a promissory note of $12,200 for services performed. Notes Receivable (b) Sold merchandise on account to a customer for $9,30. Other Receivables Accounts Receivable (c) Advanced $5,000 to an employee. (d) Estimated $5,000 of income tax to be refunded. (e) Extended a customer's account for six months by accepting a note in exchange for the amount owed on the account. (f) Sales tax (HST) of $2,500 is recoverable at the end of the quarter.arrow_forwardIn order to produce a set of accounts for a business, the total sales and purchases must be known. A business can often provide details of cash sales and purchases. In order to find the total credit sales and credit purchases, control accounts can be used. Elizabeth Berry provided the following information: At the beginning of the financial year debtors were £5,610. During the year receipts from debtors amounted to £69,630. At the end of the year debtors owed her £7,710. We can find the total credit sales by constructing a control account.arrow_forward
- How would you record the collection of a $500 debt from a customer who purchased merchandise on account?arrow_forwardDonner's customer, Blitzen, paid off an $8,300 balance on its account receivable. Blitzen should record the transaction as credit to Accounts Payable-Donner and a debit to Cash. O True O Falsearrow_forwardSales-Related Transactions, Including the Use of Credit Cards Journalize the entries for the following transactions: a. Sold merchandise for cash, $22,250. The cost of the merchandise sold was $13,350. (Record the sale first.) fill in the blank fill in the blank fill in the blank fill in the blank b. Sold merchandise on account, $11,880. The cost of the merchandise sold was $7,130. (Record the sale first.) fill in the blank fill in the blank fill in the blank fill in the blank c. Sold merchandise to customers who used MasterCard and VISA, $118,400. The cost of the merchandise sold was $71,040. (Record the sale first.) fill in the blank fill in the blank fill in the blank fill in the blank d. Sold merchandise to customers who used American Express, $35,660. The cost of the merchandise sold was $21,400. (Record the sale first.)…arrow_forward
- A company sold goods worth $10,000 to a customer on credit. The terms of the credit are 3/15, net 45. The customer paid within the discount period. Calculate the amount received from the customer, the discount allowed, and the journal entry to record the transaction.arrow_forwardCalculation of Net Realizable Value K. L. Dearborn owns a department store that has a $45,500 balance in Accounts Receivable and a $3,000 credit balance in Allowance for Doubtful Accounts. 1. Determine the net realizable value of the accounts receivable? 2. Assume that an account receivable in the amount of $500 was written off using the allowance method. Determine the net realizable value of the accounts receivable after the write-off?arrow_forwardDetermine the financial statement effects of Accounts Payable Transactions, when Hobson Company has the following items: Purchases $1,250 of inventory on credit. Sells inventory for $1,650 on credit. Records $1,260 cost of sales for transaction b. Receives $1,650 cash towards accounts receivable. Pays $1,260 cash to settle accounts payable.arrow_forward
- Nieman Company purchased merchandise on account from Springhill Company for $12,100, terms 2/10, n/30. Nieman returned merchandise with an invoice amount of $2,800 and received full credit. a. If Nieman Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar. b. What account is debited by Nieman Company to record the return?arrow_forwardOn January 12th, Gates Gems returned merchandise they received on account from Gem Warehouse in the amount of $800. What is the journal entry to record this transaction? Debit Accounts Payable/Gem Warehouse, $800; credit Purchases Returns and Allowances, $800 Debit Accounts Receivable/Gem Warehouse, $800; credit Purchases, $800 Debit Purchases, $800; credit Accounts Payable/Gem Warehouse, $800 Debit Accounts Receivable/Gem Warehouse, $800; credit Purchases Returns and Allowances $800arrow_forwardBarans Company purchased merchandise on account from Springhill Company for $10,600, terms 2/10, n/30. Barans returned merchandise with an invoice amount of $2,200 and received full credit. a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar. b. What account is debited by Barans Company to record the return?arrow_forward
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