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The following were selected from among the transactions complete Hunter Co. during the current year. Hunter Co. sells and installs home and business security systems. Jan. 15. Loaned $6,000 cash to Dan Hough, receiving a 90-day, 8% note. Feb. 6. Sold merchandise on account to Kent and Son, $16,000. The cost of the merchandise sold […]

The following summarized data were provided by the records the year ended December 31, 2010: Sales of merchandise for cash ………………………………$223,000 Sales of merchandise on credit ……………………………… 40,000 Cost of goods sold ………………………………………….. 143,000 Selling expense ……………………………………………… 45,200 Administrative expense ……………………………………… 20,000 Sales returns and allowances ………………………………… 8,000 Items not included in above amounts: Estimated […]

The following transactions were completed by Axiom Management Feb. 17. Received 25% of the $30,000 balance owed by Gillespie Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 11. Reinstated the account of Colleen Bertram, which had been written off in the preceding year as uncollectible. Journalized the receipt of $4,250 cash […]

Complete the following statements using either ?odebit?? or ?ocredi (a) The asset account Prepaid Insurance is increased with a _________. (b) The owner’s drawing account is increased with a _________. (c) The asset account Accounts Receivable is decreased with a _________. (d) The liability account Accounts Payable is decreased with a _________. Complete the following […]

Zero-Interest-Bearing Note Receivable On Rolen Machinery Co. sold a machine and accepted the customer’s zero-interest-bearing note. Rolen normally makes sales on a cash basis. Since the machine was unique, its sales price was not determinable using Rolen’s normal pricing practices. After receiving the first of two equal annual installments on September 30, 2010, Rolen immediately […]

Sale of Notes Receivable Corrs Wholesalers Co. sells industrial equipment for a standard 3-year note receivable. Revenue is recognized at time of sale. Each note is secured by a lien on the equipment and has a face amount equal to the equipment’s list price. Each note’s stated interest rate is below the customer’s market rate […]

Comprehensive Error Analysis on March 5, 2011, you were hired. Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records for 2009 and 2010, you discover that no adjustments have yet been made for the items listed below. Items 1. Interest income of […]

Comprehensive Accounting Change and Error Analysis Problem Botti were organized in late 2008 to manufacture and sell hosiery. At the end of its fourth year of operation, the company has been fairly successful, as indicated by the following reported net incomes. 2008 $140,000a 2010 $205,000 2009 160,000b 2011 276,000 a Includes a $10,000 increase because […]

Reporting of Notes Receivable, Interest, and Sale of Receivables July 1, 2010, Mores an Company sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Mores an will receive interest at the prevailing rate for a note of this type. Both the principal and interest are due in one […]

Reporting Net Sales with Credit Sales Reporting Net Sales with Credit Sales, Sales Discounts, Sales Returns, and Credit Card Sales The following transactions were selected from among those completed by Cadence Retailers in 2011: Nov. 20 Sold 20 items of merchandise to Customer B at an invoice price of $5,500 (total); terms 3/10, n/30. 25 […]