Summary ACCT 211 Connect Homework Chapter 7 Exercises Liberty University answers complete solutions (latest 2022/2023) You'll get 2 XLSX Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With

ACCT 211 Connect Homework Chapter 7 Exercises Liberty University answers complete solutions (latest 2022/2023) You'll get 2 XLSX Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine accepts is the Continental Card. Levine sends its accumulated receipts to Continental on a weekly basis and is paid by Continental about a week later. Continental assesses a 2.5% charge on sales for using its card. Apr. 8 Sold merchandise for $8,400 (that had cost $6,000) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account. 12 Sold merchandise for $5,600 (that had cost $3,500) and accepted the customer's Continental Card. Transferred $5,600 of credit card receipts to Continental, requesting payment. 20 Received Continental's check for the April 12 billing, less the service charge. Prepare journal entries to record the above selected credit card transactions of Levine Company. Date General Journal Debit Credit 4/8 Cash 7,488 Credit Card Expense 312 Sales 7,800 4/8 Cost of Goods Sold 5,764 Merchandise Inventory 5,674 4/12 Accounts Receivable- Continental 8,872 Credit Card Expense 228 Sales 9,100 4/12 Cost of Goods Sold 5,897 Merchandise Inventory 5,987 4/20 Cash 8,872 Accounts Receivable – Continental 8,872 Exercise 9-3 Direct write-off method LO P1 Dexter Company applies the direct write-off method in accounting for uncollectible accounts. March 11 Dexter determines that it cannot collect $45,000 of its accounts receivable from its customer Lester Company. 29 Lester Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above selected transactions of Dexter. Date General Journal Debit Credit 3/11 Bad Debts Expense 45,000 Accounts Receivable- Lester Co. 45,000 3/29 Accounts Receivable- Lester Co. 45,000 Bad Debts Expense 45,000 3/29 Cash 45,000 Accounts Receivable- Lester Co. 45,000   Exercise 9-4 Percent of sales method; write-off LO P2 At year-end (December 31), Chan Company estimates its bad debts as 0.5% of its annual credit sales of $975,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $580 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare the journal entries for these transactions. Date General Journal Debit Credit 12/31 Bad Debts Expense 4,875 Allowance for Doubtful Accounts 4,875 2/1 Allowance for Doubtful Accounts 580 Accounts Receivable- P. Park 580 5/1 Accounts Receivable- P. Park 580 Allowance for Doubtful Accounts 580 5/5 Cash 580 Accounts Receivable- P. Park 580 Exercise 9-5 Percent of accounts receivable method LO P2 At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2015, it has outstanding accounts receivable of $55,000, and it estimates that 2% will be uncollectible. Prepare the adjusting entry to record bad debts expense for year 2015 under the assumption that the Allowance for Doubtful Accounts has: (a) a $415 credit balance before the adjustment. (b) a $291 debit balance before the adjustment Transaction General Journal Debit Credit (a) Bad Debts Expense 685 Allowance for Doubtful Accounts 685 (b) Bad Debts Expense 1,391 Allowance for Doubtful Accounts 1,391 Exercise 9-11 Notes receivable transactions LO P3 Following are selected transactions Danica Company for 2014 and 2015. 2014 Dec. 13 Accepted a $9,500, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable. 31 Prepared an adjusting entry to record the accrued interest on the Lee note. 2015 Jan. 27 Received Lee's payment for principal and interest on the note dated December 13. Mar. 3 Accepted a $5,000, 10%, 90-day note dated March 3 in granting a time extension on the past-due account receivable of Tomas Company. 17 Accepted a $2,000, 30-day, 9% note dated March 17 in granting H. Cheng a time extension on his past-due account receivable. Apr. 16 H. Cheng dishonors his note when presented for payment. May 1 Wrote off the H. Cheng account against the Allowance for Doubtful Accounts. June 1 Received the Tomas payment for principal and interest on the note dated March 3. First, complete the table below to calculate the interest amounts. (Do not round your intermediate calculations. Use 360 days a year.) M. Lee Note: Total Through Maturity Amount Accrued at December 31 Interest Recognized January 27 Principal 9,500 9,500 9,500 Rate (%) 8% 8% 8% Time 45/360 18/360 27/360 Total interest 95 38 57 Tomas Co Note: H. Cheng Note: Total Through Maturity Principal 5,000 Rate (%) 10% Time 90/360 Total interest 125 Total Through Maturity Principal $2,000 Rate (%) 9% Time 30/360 Total interest /-1$15 Use those calculated values to prepare your journal entries. Date General Journal Debit Credit 12/13/14 Notes Receivable 9,500 Accounts Receivable – Miranda Lee 9,500 12/31/14 Interest Receivable – Miranda Lee 38 Interest Revenue – Miranda Lee 38 01/27/15 Cash 9,595 Interest Revenue 95 Notes Receivable 9,500 3 3/3/15 Notes Receivable 5,000 Accounts Receivable – Tomas Company 5,000 3/17/15 Notes Receivable 2,000 Accounts Receivable – H. Cheng 2,000 4/16/15 Accounts Receivable – H. Cheng 2,015 Notes Recievable 2,000 Interest Revenue 15 5/1/15 Allowances for Doubtful Accounts 2,015 Accounts Receivable – H. Cheng 2,015 6/1/15 Cash 5,125 Interest Revenue 125 Notes receivable – Tomas Company 5,000   Exercise 9-15 Accounts receivable turnover LO A1 The following information is from the annual financial statements of Raheem Company. 2015 2014 2013 Net sales $ 405,140 $ 335,280 $ 388,000 Accounts receivable, net (year-end) 44,800 41,400 34,800 ________________________________________ Compute its accounts receivable turnover for 2014 and 2015. Accounts Receivable Turnover Choose Numerator: / Choose Denominator: = Accounts Receivable Turnover Net sales / Average accounts receivable, net = Accounts receivable turnover 2014: $335,280 / $38,100 = 8.8 times 2015: $405,140 / $43,100 = 9.4 times