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COMM 217 Chap 6-7 live complete update 2024 Concordia University
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COMM 217 Chap 6-7 live complete update 2024 Concordia University
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COMM 217 Chap 6-7 live complete update 2024 Concordia UniversityP6-6 Determining bad debt expense based on aging analysis and interpreting ratios
IceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred betweenApril 1
and June 30, 2020:
April 10 Received an order from Peter’s appliances, a wholesaler, for 10 machines
April 30 Sold 15 machines to Yuri Inc. on credit
May 1 The purchasing manager of Peter’s appliances visited IceKreme’s factory and purchased
12machines instead of the 10 machines that were previously ordered
May 5 Yuri Inc. paid for the machines purchased on April 30
May 7 Wrote off $12,000 of accounts receivable that were considered uncollectible. These
receivablesrelate to sales made prior to April 1,2020
May 15 Peters’ appliances returned two defective machines and paid the amount
dueJune 1 Received $80,000 from Cheng Ltd. On account
June 30 Recovered $3,000 from the receivables that were written off on May 10
Additional information is as follows:
- IceKreme sold all machines at $10,000 per unit
- All of IceKreme’s sales were on credit with terms 2/10, n/30
- IceKreme’s records included the following items and their balances as at March 31,2020
Accounts receivable $60,000
Allowance of doubtful accounts (credit balance) 15,000
Net sales 600,000
REQUIRED:
1. Prepare the journal entries to record the transactions that occurred from April 1 to June 20,2020
April 10 No entry
April 30 Accounts receivable 150,000
Sales revenue 150,000
May 1 Accounts receivable 120,000
Sales revenue 120,000
May 5 Cash 147,000
Sales discounts (+XR, -R, -SE) 3,000
Accounts receivable 150,000
May 7 Accounts receivable 100,000
Sales revenue 100,000
May 10 Allowance for doubtful accounts (-XA, +A) 12,000
Accounts receivable (-A) 12,000
May 15 Cash 100,000
Sales return and allowances (+XR, -R, -SE) 20,000
Accounts receivable (-A) 120,000
June 1 Cash 80,000
Accounts receivable (-A) 80,000
June 30 Accounts receivable 3,000
Allowance for doubtful accounts 3,000
, Cash 3,000
Accounts receivable 3,000
April 30-15x$10,000
May 1-12x$10,000
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