lOMoARcPSD|3013804
Ch07-180204110130
Intermediate Accounting (California State University
Long Beach)
, Accounting
Intermediat
lOMoARcPSD|3013804
e IFRS Edition-2nd
Questions & Solutions
Chapter 7
Cash and
Receivables
Donald E. Kieso
Jerry J.
,Weygandt Terry
D. Warfield
, lOMoARcPSD|3013804
BRIEF EXERCISES
1 BE7-1 Kraft Enterprises owns the following assets at December 31, 2015.
Cash in bank—savings €68,00 Checking account balance €17,000
account 0
Cash on hand 9,30 Postdated checks 750
0
Tax refund due 31,400 Certificates of deposit (180- 90,000
day)
What amount should be reported as cash?
4 BE7-2 Restin Co. uses the gross method to record sales made on credit. On June 1, 2015, it made
sales of
£50,000 with terms 3/15, n/45. On June 12, 2015, Restin received full payment for the
June 1 sale. Prepare the required journal entries for Restin Co.
4 BE7-3 Use the information from BE7-2, assuming Restin Co. uses the net method to
account for cash discounts. Prepare the required journal entries for Restin Co.
5 BE7-4 Wilton, Inc. had net sales in 2015 of €1,400,000. At December 31, 2015, before
adjusting entries, the balances in selected accounts were Accounts Receivable €250,000
debit, and Allowance for Doubtful Accounts €2,400 credit. If Wilton estimates that 2% of its
net sales will prove to be uncollectible, prepare the December 31, 2015, journal entry to
record bad debt expense.
5 BE7-5 Use the information presented in BE7-4 for Wilton, Inc.
(a) Instead of estimating the uncollectibles at 2% of net sales, assume that 10% of
accounts receivable will prove to be uncollectible. Prepare the entry to record bad
debt expense.
(b) Instead of estimating uncollectibles at 2% of net sales, assume Wilton prepares an
aging schedule that estimates total uncollectible accounts at €24,600. Prepare the
entry to record bad debt expense.
6 BE7-6 Milner Family Importers sold goods to Tung Decorators for $30,000 on November
1, 2015, accepting Tung’s $30,000, 6-month, 6% note. Prepare Milner’s November 1 entry,
December 31 annual adjusting entry, and May 1 entry for the collection of the note and
interest.
6 BE7-7 Deng Acrobats lent NT$16,529 to Donaldson, Inc., accepting Donaldson’s 2-year,
NT$20,000, zero- interest-bearing note. The implied interest rate is 10%. Prepare Deng’s
Ch07-180204110130
Intermediate Accounting (California State University
Long Beach)
, Accounting
Intermediat
lOMoARcPSD|3013804
e IFRS Edition-2nd
Questions & Solutions
Chapter 7
Cash and
Receivables
Donald E. Kieso
Jerry J.
,Weygandt Terry
D. Warfield
, lOMoARcPSD|3013804
BRIEF EXERCISES
1 BE7-1 Kraft Enterprises owns the following assets at December 31, 2015.
Cash in bank—savings €68,00 Checking account balance €17,000
account 0
Cash on hand 9,30 Postdated checks 750
0
Tax refund due 31,400 Certificates of deposit (180- 90,000
day)
What amount should be reported as cash?
4 BE7-2 Restin Co. uses the gross method to record sales made on credit. On June 1, 2015, it made
sales of
£50,000 with terms 3/15, n/45. On June 12, 2015, Restin received full payment for the
June 1 sale. Prepare the required journal entries for Restin Co.
4 BE7-3 Use the information from BE7-2, assuming Restin Co. uses the net method to
account for cash discounts. Prepare the required journal entries for Restin Co.
5 BE7-4 Wilton, Inc. had net sales in 2015 of €1,400,000. At December 31, 2015, before
adjusting entries, the balances in selected accounts were Accounts Receivable €250,000
debit, and Allowance for Doubtful Accounts €2,400 credit. If Wilton estimates that 2% of its
net sales will prove to be uncollectible, prepare the December 31, 2015, journal entry to
record bad debt expense.
5 BE7-5 Use the information presented in BE7-4 for Wilton, Inc.
(a) Instead of estimating the uncollectibles at 2% of net sales, assume that 10% of
accounts receivable will prove to be uncollectible. Prepare the entry to record bad
debt expense.
(b) Instead of estimating uncollectibles at 2% of net sales, assume Wilton prepares an
aging schedule that estimates total uncollectible accounts at €24,600. Prepare the
entry to record bad debt expense.
6 BE7-6 Milner Family Importers sold goods to Tung Decorators for $30,000 on November
1, 2015, accepting Tung’s $30,000, 6-month, 6% note. Prepare Milner’s November 1 entry,
December 31 annual adjusting entry, and May 1 entry for the collection of the note and
interest.
6 BE7-7 Deng Acrobats lent NT$16,529 to Donaldson, Inc., accepting Donaldson’s 2-year,
NT$20,000, zero- interest-bearing note. The implied interest rate is 10%. Prepare Deng’s
