Question :
106.Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy : 1258897
106.Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy Janitorial on October 17. What entry should Uniform Supply make on January 15 of the next year when the note is paid?
A. Debit Notes Receivable $4,800; debit Interest Receivable $120; credit Sales $4,920.
B. Debit Cash $4,920; credit Notes Receivable $4,920.
C. Debit Cash $4,920; credit Interest Revenue $100; credit Interest Receivable $20; credit Notes Receivable $4,800.
D. Debit Cash $4,920; credit Interest Revenue $20; credit Interest Receivable $100; credit Notes Receivable $4,800.
E. Debit Cash $4,920; credit Interest Revenue $120; credit Notes Receivable $4,800.
Interest accrued at December 31: $4,800 * .10 * 75/360 = $100Interest earned during January: $4,800 * .10 * 15/360 = $20
107.Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy Janitorial on October 17. What entry should Uniform Supply make on December 31, to record the accrued interest on the note?
A. Debit Cash $20; credit Notes Receivable $20.
B. Debit Cash $100; credit Notes Receivable $100.
C. Debit Interest Receivable $20; credit Interest Revenue $20.
D. Debit Interest Receivable $100; credit Interest Revenue $100.
E. Debit Cash $120; credit Interest Revenue $100; credit Interest Receivable $20.
Interest accrued at December 31: $4,800 * .10 * 75/360 = $100
108.Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy Janitorial on October 17. If the note is dishonored, what entry should Uniform Supply make on January 15 of the next year?
A. Debit Notes Receivable $4,800; debit Interest Receivable $120; credit Sales $4,920.
B. Debit Cash $4,920; credit Notes Receivable $4,920.
C. Debit Cash $4,920; credit Interest Revenue $100; credit Interest Receivable $20, credit Notes Receivable $4,800.
D. Debit Cash $4,920; credit Interest Revenue $20; credit Interest Receivable $100, credit Notes Receivable $4,800.
E. Debit Accounts Receivable $4,920; credit Interest Revenue $20; credit Interest Receivable $100, credit Notes Receivable $4,800.
Interest accrued at December 31: $4,800 * .10 * 75/360 = $100Interest earned during January: $4,800 * .10 * 15/360 = $20
109.Valley Spa purchased $7,800 in plumbing components from Tubman Co. Valley Spa Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note?
A. $130
B. $7,800
C. $7,930
D. $8,050
E. $8,130
$7,800 * 0.10 * 60/360 = $130 + $7,800 = $7,930
110.Valley Spa purchased $7,800 in plumbing components from Tubman Co. Valley Spa Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the journal entry to record the dishonored note?
A. Debit Accounts Receivable $7,930; debit Bad Debt Expense $130; credit Notes Receivable $7,800.
B. Debit Bad Debt Expense $7,930; credit Accounts Receivable $7,930.
C. Debit Bad Debt Expense $7,800; credit Notes Receivable $7,800.
D. Debit Accounts Receivable—Valley Spa $7,800; credit Notes Receivable $7,800.
E. Debit Accounts Receivable—Valley Spa $7,930, credit Interest Revenue $130; credit Notes Receivable $7,800.
$7,800 * 0.10 * 60/360 = $130 + $7,800 = $7,930
111.Which of the following is not true about the Allowance for Doubtful Accounts?
A. It is a contra asset account.
B. It is used instead of reducing accounts receivable directly.
C. It is debited when uncollectible accounts are written off.
D. It is a liability account.
E. It is credited when bad debts expense is estimated and recorded.
112.Jervis sells $75,000 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 5% factoring fee. What entry should Jervis make on to record the transaction?
A. Debit Cash $71,250; debit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000
B. Debit Accounts Receivable $71,250; debit Factoring Fee Expense $3,750; credit Cash $75,000
C. Debit Cash $75,000; credit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000
D. Debit Cash $71,250; credit Accounts Receivable $71,250
E. Debit Accounts Receivable $75,000; credit Factoring Fee Expense $3,750; credit Cash $71,250
Factoring fee expense: $75,000 * .05 = $3,750Cash received: $75,000 – $3,750 = $71,250
113.Jervis accepts all major bank credit cards, including those issued by Northern Bank (NB), which assesses a 3% charge on sales for using its card. On June 28, Jervis had $3,500 in NB Card credit sales. What entry should Jervis make on June 28 to record the deposit?
A. Debit Cash $3,500; credit Sales $3,500
B. Debit Accounts Receivable $3,500; credit Sales $3,500
C. Debit Cash $3,605; credit Credit Card Expense $105; credit Sales $3,500
D. Debit Cash $3,395; debit Credit Card Expense $105; credit Sales $3,500
E. Debit Accounts Receivable $3,395; debit Credit Card Expense $105; credit Sales $3,500
Credit card fee expense: $3,500 * .03 = $105Cash received: $3,500 – $105 = $3,395
114.Brinker accepts all major bank credit cards, including First Savings Bank’s, which assesses a 2.5% charge on sales for using its card. On May 26, Brinker had $4,800 in First Savings Bank Card credit sales. What entry should Brinker make on May 26 to record the deposit?
A. Debit Accounts Receivable $4,800; credit Sales $4,800.
B. Debit Cash $4,680; debit Credit Card Expense $120; credit Sales $4,800.
C. Debit Cash $4,800; credit Sales $4,800.
D. Debit Cash $4,920; credit Credit Card Expense $120; credit Sales $4,800.
E. Debit Accounts Receivable $4,680; debit Credit Card Expense $120; credit Sales $4,800.
Credit card fee expense: $4,800 * 0.025 = $120Cash received: $4,800 – $120 = $4,680
115.Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 4% of accounts receivable, what is the amount of the bad debts expense adjusting entry?
A. $4,845
B. $4,180
C. $3,515
D. $3,700
E. $3,850
$104,500 * 0.04 = $4,180 – $665 = $3,515
