Financial statement data for years ending December 31 for Blum Company are shown

Question

Financial statement data for years ending December 31 for Blum Company are shown below.

a. Determine the accounts receivable turnover for 2014 and 2013. Round your answers to one decimal place.

b. Determine the number of days' sales in receivables for 2014 and 2013. Use 365 days in a year in your computations. Round interim calculations and your final answers to one decimal place.

Entries for Receipt and Dishonor of Notes Receivable

Journalize the following transactions in the accounts of Jamba Co., which operates a riverboat casino. Assume 360 days in a year. For a compound transaction, if an amount box does not require an entry, leave it blank. Round final answers to the nearest cent when necessary.

Mar. 1

Accounts Receivable-Tomekia Co.

Allowance for Doubtful Accounts

Bad Debt Expense

Cash

Notes Payable

Notes Receivable

Correct 2

Correct 3

Accounts Payable-Tomekia Co.

Accounts Receivable-Tomekia Co.

Cash

Interest Receivable

Interest Revenue

Notes Receivable

Correct 4

Correct 5

Mar. 18

Accounts Receivable-Mystic Co.

Allowance for Doubtful Accounts

Cash

Interest Receivable

Notes Payable

Notes Receivable

Correct 7

Correct 8

Accounts Payable-Mystic Co.

Accounts Receivable-Mystic Co.

Bad Debt Expense

Cash

Interest Receivable

Notes Receivable

Correct 9

Correct 10

Apr. 30

Accounts Payable-Mystic Co.

Accounts Receivable-Tomekia Co.

Cash

Interest Payable

Interest Receivable

Notes Receivable

Correct 12

Correct 13

Correct 14

Accounts Receivable-Tomekia Co.

Allowance for Doubtful Accounts

Cash

Interest Receivable

Notes Payable

Notes Receivable

Correct 15

Correct 16

Correct 17

Accounts Payable-Tomekia Co.

Accounts Receivable-Tomekia Co.

Cash

Interest Expense

Interest Receivable

Interest Revenue

Correct 18

Correct 19

Correct 20

May 17

Accounts Receivable-Mystic Co.

Allowance for Doubtful Accounts

Cash

Interest Payable

Interest Receivable

Notes Receivable

Correct 22

Correct 23

Correct 24

Accounts Receivable-Mystic Co.

Bad Debt Expense

Cash

Interest Receivable

Notes Payable

Notes Receivable

Correct 25

Correct 26

Correct 27

Accounts Receivable-Mystic Co.

Allowance for Doubtful Accounts

Bad Debt Expense

Cash

Interest Payable

Interest Revenue

Correct 28

Correct 29

Correct 30

July 29

Accounts Receivable-Tomekia Co.

Bad Debt Expense

Cash

Interest Expense

Interest Receivable

Notes Receivable

Correct 32

Correct 33

Correct 34

Accounts Receivable-Tomekia Co.

Allowance for Doubtful Accounts

Cash

Interest Receivable

Notes Payable

Notes Receivable

Correct 35

Correct 36

Correct 37

Accounts Payable-Tomekia Co.

Allowance for Doubtful Accounts

Cash

Interest Payable

Interest Revenue

Notes Receivable

Correct 38

Correct 39

Correct 40

Aug. 23

Accounts Payable-Mystic Co.

Accounts Receivable-Mystic Co.

Allowance for Doubtful Accounts

Bad Debt Expense

Cash

Notes Receivable

Correct 42

Correct 43

Accounts Payable-Mystic Co.

Accounts Receivable-Mystic Co.

Allowance for Doubtful Accounts

Bad Debt Expense

Cash

Interest Receivable

Correct 44

Correct 45

2014 2013 Net sales $6,359,760 $5,794,740 Accounts receivable: Beginning of year 443,260 489,790 End of year 520,340 430,010

Explanation / Answer

a)

Accounts receivable turnover ratio = Net Credit Sales/ Average accounts receivable

2014 = 6359760/((443260+520340)/2) = 13.2

2013 = 5794740/((489790+430010)/2) = 12.6

b)

Number of days' sales in receivables = 365/Accounts receivable turnover ratio

2014 = 365/13.2 = 27.6

2013 = 365/12.6 = 28.9

c)

Mar 1 = Dr 9% Notes Receivable 21,600
Cr Accounts Receivable 21,600

Mar 18 = Dr 6% Notes Receivable 12,900
Cr Accounts Receivable 12,900

Apr 30 = Dr Accounts Receivable 21,924
Cr Notes Receivable 21,600
Cr Interest Revenue 324
(21600*9%*60/360)

May 17 = Dr Accounts Receivable 13,029
Cr Notes Receivable 12,900
Cr Interest Revenue 129
(12900*0.06*60/360)

July 29 = Dr Cash 22,582
Cr Accounts Receivable 21924
Cr Interest Revenue 658
(21600*0.12*90/360)

Aug 23 = Dr Allowance for Doubtful Accounts 13,029
Cr Accounts Receivable 13,029

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