Answers of Exercises solved in the 1st Tutorial

BE 9-2
Date Account Dr. Cr.
July 1 A/R 17200
Sales Revenue 17200
July 8 Sales Return& Allowance 3800
A/R 3800
July 11 Cash 13132
Discount (13400*2%) 268
A/R 13400 (17200 – 3800)

E9-1
DATE ACCOUNT Dr. Cr.
March 1 A/R 5000
Sales Revenue 5000
March 3 Sales Return& Allowance 500
A/R 500
March 9 Cash 4410
Discount (4500*2%) 90
A/R 4500
March 15 A/R 400
Sales Revenue 400
March 31 A/R 6
Interest Revenue 6 (400*1%)
E9-2
A)
Date Account Dr. Cr.
Jan 6 A/R 7000
Sales Revenue 7000
Jan 16 Cash 6860
Discount 140
A/R 7000

B)
Date Account Dr. Cr.
Jan 10 A/R 9000
Sales Revenue 9000
Feb 12 Cash 5000
A/R 5000
March 10 A/R 40
Interest Revenue 40 (4000*1%)
 Answers of Exercises solved in the 2nd Lecture
BE 9-3
A)
BadDebt Expenses 31000
Allowance for doubtful accounts 31000
B)

Current Assets

Inventory 130,000

Accounts receivable 600,000

Less: Allowance for doubtful accounts ( 31,000 )

Cash 90,000

Total current assets 789,000

BE9-4
A)
Allowance for doubtful account 6200
A/R 6200

B)
Cash realizable value Before the write-off
A/R – Allowance for doubtful account
700,000 – 54,000 = 646,000
Cash realizable value After the write-off
A/R – Allowance for doubtful account
693,800 – 47,800 = 646,000

E9-3
A/R = 110,000
Sales Revenue = 840,000
Sales return and allowance = 20,000
Net Sales = Sales Revenue - Sales Return and allowance
A) Baddebt expense 1400
A/R 1400

B)

1% of net sales 10% of A/R

1% *820,000 = 8,200 Baddebt expense 8900
Bad Debt expense 8200 AFDA 8900
Allowance for Doubtful account 8200

C) 0.75% of net sales.

Baddebt expense 6,150
Allowance for doubtful account 6,150
6% of A/R
Baddebt expense 6800
Allowance for doubtful account 6800