) On December 1, 2019, Pinewood Company sold machinery to a customer for $2,000. Pinewood regularly sells machinery. The customer c
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38) On December 1, 2019, Pinewood Company sold machinery to a customer for $2,000. Pinewood regularly sells machinery. The customer could not pay at the time of sale but agreed to pay 9 months later and signed a 9-month note at 12% interest. Prepare the
39) ABC Accepted a 90 day, 8%, $50,000 Note Receivable from from a customer to replace an Account Receivable. The note matured and ABC received $50,500 at maturity. Record the entry for the collection of the note receivable.
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- Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise. The merchandise had a cost to Resin Milling of $170,000. The terms of the note are 24-month maturity date on December 31, 2019 at a 5% annual interest rate. The customer does not pay on its account and dishonors the note. Record the journal entries for Resin Milling for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on January 1, 2020, assuming interest has not been recognized before note maturityWindow World extended credit to customer Nile Jenkins in the amount of $130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is $56,200. On September 4, Window World determined that Nile Jenkinss account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.
- Resin Milling issued a $420,000 note on January 1, 2018 to a customer in exchange for merchandise. The merchandise had a cost to Resin Milling of $181,000. The terms of the note are 24-month maturity date on December 31, 2019 at a 7% annual interest rate. The customer does not pay on its account and dishonors the note. Record the journal entries for Resin Milling for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on January 1, 2020, assuming interest has not been recognized before note maturity If an amount box does not require an entry, leave it blank. Jan. 1, 2018 Notes Receivable Notes Receivable Sales Revenue Sales Revenue To record sale in exchange for notes receivable,24-month maturity, 7% interest rate Jan. 1, 2018 Cost of Goods Sold Cost of Goods Sold Merchandise Inventory Merchandise Inventory To record the cost of sale Jan. 1, 2020 - Select - - Select - - Select - - Select…On February 15, Barbour Industries buys $800,000 of inventory on credit. On March 31, Barbour approaches its supplier because it cannot pay the $800,000. The supplier agrees to roll the amount into a note due on September 30 with 10% interest. Required: Prepare the necessary journal entries from February 15 through payment on September 30. For those boxes in which no entry is required, leave the box blank.On November 1, 2019, Sherman Company sold $20,000 of merchandise inventory to a customer that originally cost $11,000. Sherman accepted a 90 day note receivable from the customer as payment for the inventory. The customer agreed to a 4% interest rate and will pay both principle and interest on January 31, 2020. Sherman Company closes their accounting records on December 31 and will need to prepare financial statements on that date. Required: Prepare journal entries for Sherman Company for: 1) November 1, 2019 – the date of sale 2) December 31, 2019 – adjustment (to recognize interest revenue) 3) January 31, 2020 – to record customer payment of principle and interest
- Maplewood Supply received a $5,350 invoice dated 4/15/20. The $5,350 included $350 freight. Terms were 2/10, 1/30, n/60. (If more than one discount, assume date of last discount.) a. If Maplewood pays the invoice on April 27, 2020 what will it pay? Payable amount b. If Maplewood pays the invoice on May 21, what will it pay? Payable amountOn July 10, 2020, Bonita Ltd. sold GPS systems to retailers on account for a selling price of $1,020,000 (cost $816,000). Bonita grants the right to return systems that do not sell in three months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned systems to Bonita and were granted credits of $86,000. The company follows IFRS.On 10 July 2021, Pop Music sold CDs to retailers on account and recorded sales revenue of $700,000 (cost $560,000). Pop grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By 11 October 2021, retailers returned CDs to Pop and were granted credit of $78,000. Required: Prepare Pop’s journal entries to record (a) the sale on 10 July 2021, and (b) $78,000 of returns on 11 October 2021.
- On July 10, 2020, Cheyenne Music sold CDs to retailers on account and recorded sales revenue of $658,000 (cost $506, 660). Cheyenne grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Cheyenne and were granted credit of $80,000. Prepare Cheyenne's journal entries to record (a) the sale on July 10, 2020, and (b) $80,000 of returns on October 11, 2020, and on October 31, 2020. Assume that Cheyenne prepares financial statement on October 31, 2020. (To record sales) (To record cost of goods) (To record sales returns) (To record cost of goods returned)Vaughn Family Importers sold goods to Tung Decorators for $36,600 on November 1, 2020, accepting Tung's $36,600, 6-month, 6% note. Prepare Vaughn's November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit CreditOmega Company sells its products in expensive, reusable containers. The customer is charged a deposit for each container delivered and receives a refund for each container returned within two years after the year of delivery. Omega accounts for the containers not returned within the time limit as being sold at the deposit amount. Information for 2020 is as follows: A. Containers held by customers at December 31, 2019 from deliveries in: 2018, P85,000; and 2019, P240,000. B. Containers delivered in 2020: P430,000. C. Containers returned in 2020 from deliveries in: 2018, P57,500; 2019, P140,000; and 2020, P157,000. 1. What is the total amount of Omega Company’s liability for returnable containers at December 31, 2020? 2. How much revenue from container sales should be recognized for 2020?
