Question

Assignment 4 – 19.Jul.2020

Newman stores had the following balance extracted from its Feb.28 balance sheet

Account receivable $22,000 Dr

Allowance for doubtful account 8,000 Cr

The following transactions occurred during march.

1. On March 1, Newman stores Sold merchandise on account to Primark Company for $6,500, terms 3/10. n/30.

2. On March 5, Primark Company returned merchandise worth $500 to Newman stores.

3. On March 11, Newman collected the amount due from Primark Company from the March 1 sale.

4. On March 15, Newman stores sold merchandise for $650 in its retail outlet. The customer (ahmad) used his Newman credit card.

5. On march 17, The customer ( ahmad) paid $550 of the balance.

6. On March.20, Newman stores decided that $7,000 of account receivable from previous periods will be uncollectable (Assume the company uses the allowance method).

7. On March 31, Newman stores added 1.5% monthly interest to the customer’s credit card balance.

Required:

A. Prepare journal entries for the transactions above in Newman store books.

B. Show the statement of financial position presentation of accounts receivable on March 31. (what is the amount)

Answer 1

Please find the attached sheets,

Please comment for any other explanation,

Thanks,