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Latihan Accounts Receivable

Restin plc recorded a $50,000 sale on credit on June 1st. Using the gross method, they recorded a receivable which was paid in full on June 12th. Using the net method, they would have recorded a discounted receivable from the start. Bolton plc sold goods to Arquette on June 3rd for £2,000 on credit terms. They received payment on June 12th but if payment was delayed until July 29th, they would forfeit the cash discount. Wilton AG estimated 8% of its 2019 receivables would be uncollectible. At year-end, it recorded a bad debt expense of €112,000 to increase its allowance

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1K views2 pages

Latihan Accounts Receivable

Restin plc recorded a $50,000 sale on credit on June 1st. Using the gross method, they recorded a receivable which was paid in full on June 12th. Using the net method, they would have recorded a discounted receivable from the start. Bolton plc sold goods to Arquette on June 3rd for £2,000 on credit terms. They received payment on June 12th but if payment was delayed until July 29th, they would forfeit the cash discount. Wilton AG estimated 8% of its 2019 receivables would be uncollectible. At year-end, it recorded a bad debt expense of €112,000 to increase its allowance

Uploaded by

Alghifary Ramadhan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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LATIHAN ACCOUNTS RECEIVABLE

1. Restin plc uses the gross method to record sales made on credit. OnJune 1, 2019, it made
sales of $50,000 with terms 3/15, n/45. On June 12, 2019,Restin received full payment for
the June 1 sale.

a. Prepare the required journalentries for Restin plc.

= June 1 Accounts Receivable 50,000


Sales Revenue 50,000

June 12 Cash 48,500*


Sales Discounts 1,500
Accounts Receivable 50,000

*$50,000 - ($50,000 X .03) = $48,500

b. Assuming Restin plc uses the net method to account for cash discounts. Prepare the
required journal entries forRestin plc.

= June 1 Accounts Receivable 48,500*


Sales Revenue 48,500

June 12 Cash 48,500


Accounts Receivable 48,500

*$50,000 - ($50,000 X .03) = $48,500

2. On June 3, Bolton plc sold to Arquette Company merchandise having a sales price of
￡2,000 with terms of 2/10, n/60. An invoice totaling ￡90, terms n/30, was received by
Arquette onJune 8 from John Booth Transport Service for the freight cost. On June 12, the
company received a check for the balance due from Arquette Company.
Instructions
a. Prepare journal entries on the Bolton plc books to record sales and receivables all the
events noted above under each of the following bases.
1. Sales and receivables are entered at gross selling price.
2. Sales and receivables are entered at net of cash discounts.

Bolton Company books (Sales and receivables are entered at gross selling price.)
= June 3
Accounts Receivable 2,000
Sales 2,000

June 12
Cash ($2,000 x 98%) 1,960
Sales Discounts 40
Accounts Receivable 2,000
Bolton Company books (Sales and receivables are entered at net of cash discounts)

= June 3
Accounts Receivable 1,960
Sales 1,960

June 12
Cash 1,960
Accounts Receivable 1,960

b. Prepare the journal entry under basis(a)(2), assuming that ArquetteCompany did not
remit payment until July 29.

= June 3
Accounts Receivable 1,960
Sales 1,960

June 29
Cash 2,000
Accounts Receivable 1,960
Sales Discounts Forfeited 40

3. Wilton, AG had net sales in 2019 of €1,400,000. At December 31,2019, 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 8% of its
receivables will prove to be uncollectible.
Prepare Journal entry to record bad debt expense, the December 31, 2019 :

= Dec 31 Bad Debt Expense 112,000


Allowance for Doubtful Accounts
($1,400,000 X 8%) 112,000

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