2. Elder Company uses the allowance method for estimating uncollectible accounts

Question

2. Elder Company uses the allowance method for estimating uncollectible accounts. Net credit sales totaled $225,000. Elder estimated that 8% will be uncollectible.

Prepare journal entries to record the following transactions:

a. Prepare the entry to record the bad debt expense for the year.

b. January 5:   Sold merchandise to Mary Benes for $1,000, terms n/15.

c. April 15:    Received $200 from Mary Benes on account.

d. August 21: Wrote off as uncollectible the balance of the Mary Benes account when she declared bankruptcy.

e. October 5:   Unexpectedly received a check for $250 from Mary Benes

3. Prepare the necessary journal entry for the following transaction.

Carlson Company sold $500,000 of its accounts receivables to a factor. The factor charges a 4% fee.

4. A customer signed a 1-year, 6% $5000 note receivable for purchases made at Madison Company. Prepare the entry to record the purchase. Prepare the entry to retire the note.

5. Baylee Company issued a note to a customer for merchandise purchased. It was a 45 day, $5000 note @ 10%. On day, 30 financial statements were prepared. Record the following entries:

a. The issuing of the note

b. The accrual of interest before financial statement preparation

c. The retirement of the note.

6. Keaubie Company has receivables totaling $433,000. They use an Aging of Receivables Report to estimate what will be uncollectible. In addition to receivables, they have the following current assets: Cash $1,000,000; Merchandise Inventory: $350,000; Prepaid Insurance: $3000; Supplies: $5000.

Complete the Aging of Receivables Report to determine uncollectible amount. Record the transaction.

b. Prepare a Current Assets section of a balance sheet and prepare the entry to record        the estimated uncollectible accounts

Aging of Receivables Report

Amount of Receivable

$185,500

$98,500

$67,000

$60,000

$22,000

Days Owed

0-30

31-60

61-90

91-120

Over 120

Percent Uncollectible

1.8%

6.5%

11%

29%

        51%

Amount Uncollectible

Total Estimated Uncollectible:

Aging of Receivables Report

Amount of Receivable

$185,500

$98,500

$67,000

$60,000

$22,000

Days Owed

0-30

31-60

61-90

91-120

Over 120

Percent Uncollectible

1.8%

6.5%

11%

29%

        51%

Amount Uncollectible

Total Estimated Uncollectible:

Explanation / Answer

Solution 2:

Note: As multiple questions are posted, i have answered first question as per chegg policy. Kindly post separate question for answer of remaining.

Journal Entries - Elder Company Event Particulars Debit Credit a Bad debts Expense Dr $18,000.00               To Allowance for doubtful Accounts $18,000.00 (To record bad debts expense) b Accounts receivables Dr $1,000.00               To Sales Revenue $1,000.00 (To record sales) c Cash Dr $200.00               To Accounts receivables $200.00 (To record cash collection from customer) d Allowance for doubtful accounts Dr $800.00               To Accounts receivables $800.00 (To write off receivables) e-1 Accounts Receivable Dr $250.00               To Allowance for doubtful Accounts $250.00 (To reinstate accounts receivables previously written off) e-2 Cash Dr $250.00               To Accounts receivables $250.00 (To record cash collection from customer)

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