Prepare the required journal entries for Restin Co.

Brief Exercise 7-2
Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $57,600 with terms 3/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale.

Prepare the required journal entries for Restin Co. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
June 1
June 12
Brief Exercise 7-4
Wilton, Inc. had net sales in 2014 of $1,469,500. At December 31, 2014, before adjusting entries, the balances in selected accounts were: Accounts Receivable $286,400 debit, and Allowance for Doubtful Accounts $2,890 credit. If Wilton estimates that 4% of its net sales will prove to be uncollectible.

Prepare the December 31, 2014, journal entry to record bad debt expense. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
December 31, 2014
Brief Exercise 7-11
Arness Woodcrafters sells $248,100 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 7% and retains an amount equal to 6% of accounts receivable. Arness estimates the fair value of the recourse liability to be $9,120.

Prepare the journal entry for Arness to record the sale. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation
Debit
Credit
Exercise 7-4
Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $3,465 per month, has just purchased a new Acura. You decided to test the accuracy of the accounts receivable balance of $270,270 as shown in the ledger.

The following information is available for your first year in business.

(1) Collections from customers $457,380
(2) Merchandise purchased 739,200
(3) Ending merchandise inventory 161,700
(4) Goods are marked to sell at 40% above cost

Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.

The ending balance of accounts receivable from customers $

Apparent shortage $

Exercise 7-5 (Part Level Submission)
On June 3, Arnold Company sold to Chester Company merchandise having a sale price of $4,200 with terms of 3/10, n/60, f.o.b. shipping point. An invoice totaling $96, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company.

(a)
Prepare journal entries on the Arnold Company books to record 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.

(If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.
Date
Account Titles and Explanation
Debit
Credit
(1)
June 3
June 12
(2)
June 3
June 12
(b)
Prepare the journal entry under basis 2, assuming that Chester Company did not remit payment until July 29. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
July 29
Exercise 7-9
The trial balance before adjustment of Reba McIntyre Inc. shows the following balances.

Dr.
Cr.
Accounts Receivable $94,100
Allowance for Doubtful Accounts 2,900
Sales Revenue (all on credit) $599,000

Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 2% of net sales. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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