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Ditzler Company, a construction supply company, uses the allowance method of accounting for uncollectible accounts receivable. Selected transactions completed by Ditzler Company are as follows: Feb. 1 Sold merchandise on account to Ames Co., $8,000. The cost of the mer- chandise sold was $4,500. Accepted a 60-day, 12% note for $8,000 from Ames Co. on account. Wrote off a $2,500 account from Dorset Co. as uncollectible. Loaned $7,500 cash to Jill Klein, receiving a 90-day, 14% note. Received the interest due from Ames Co. and a new 90-day, 14% note as a renewal of the loan. (Record both the debit and the credit to the notes receivable account.) Mar. 15. Apr. 9. 21. May 14, June 13. Reinstated the account of Dorset Co, written off on April 9, and received $2,500 in full payment. July 20. Jill Klein dishonored her note. Aug. 12. Received from Ames Co. the amount due on its note of May 14 Received from Jill Klein the amount owed on the dishonored note, plus interest for 30 days at 15%, computed on the maturity value of the note. Accepted a 60-day, 12% note for $12,000 from Global Company on account. it is estimated that 3% of the credit sales of $1,375,000 for the year en December 31 will be uncollectible. 19. Dec. 16. ded 31, Instructions Journalize the adjusting entry to record the accrued interest on December 31 on the Global Company note. 1 Journalize the transactions.
ne United States generates accounts vable as reporog accounts receivable statements Denta re- nt ae generated largely from the tickets and cargo transportation to its financial sta Dec. 31, 2007 Dec. 31, nger aine eyof these sales are processed th Current Assets redr card companies, resulting in ardy short-term in duraAccounts receivable, net of an 2006 ave recerivabies from the ers such as creait card agencies, that perticipate the sale of mileage allowance for uncollectible accounts redit card companies, hotelsof $26 at December 31, 2007 te in our SkyMiles and $21 at December 31, 2008 that the credit risk associated with 1,066 $915 tive Problem itzler Company, a construction supply company, uses the allowance method of s accounting for uncoll ting for uncollectible accounts receivable. Selected transactions completed by Ditzler Company are as follows: Feb. 1 Sold merchandise on account to Ames Co, $8,000. The cost of the mer- Mar. 15, chandise sold was $4,500. Accepted a 60-day, 12% note for $8,000 from Ames Co. on account. Wrote off a $2,500 account from Dorset Co. as uncollectible. r. 9. Loaned $7,500 cash to Jill Klein, receiving a 90-day, 14% note. 21. May 14, Received the interest due from Ames Co. and a new 90-day, 14% note as a renewal of the loan. (Record both the debit and the credit to the notes receivable account.) June 13 Reinstated the account of Dorset Co, written off on April 9, and received $2,500 in full payment. July 20. Aug. 12. Jill Klein dishonored her note. Received from Ames Co. the amount due on its note of May 14. Received from Jill Klein the amount owed on the dishonored note, plus interest for 30 days at 15%, computed on the maturity value of the note. Accepted a 60-day, 12% note for $12,000 from Global Company on account. it is estimated that 3% of the credit sales of $1,375,000 for the year ended 19. Dec. 16, 31, Instructions 1. Journalize the transactions. 2 Journalize the adjusting entry to record the accrued interest on December 31 on December 31 will be uncollectible. the Global Company note.
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