Presented below is information related to Carla Corp., which sells merchandise with terms 2/10, net 60....

Presented below is information related to Carla Corp., which sells merchandise with terms 2/10, net 60. Carla Corp. records its sales and receivables net.

July 1		Carla Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000.
5		Accounts receivable of $14,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.)
9		Specific accounts receivable of $14,300 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,500 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.)
Dec. 29		Warren Harding Co. notifies Carla that it is bankrupt and will pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.)

Prepare all necessary entries in general journal form for Carla Corp. (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. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
7/17/57/97/1112/29

7/5



7/17/57/97/1112/29

	(To record discount forfeited)
7/9


	(To record notes payable)
7/17/57/97/1112/29

7/17/57/97/1112/29

show work and explain

Solutions

Expert Solution

Answer:

Date	Particulars	Debit ($)	Credit ($)
1-jul	Accounts receivable - warren harding co	14700
	Sales revenue (15000*(100%-2%))		14700
	(To record the sales on account)
5-jul	Cash (14300*(100%-9%))	13013
	Loss on sale of receivable (14300*9%)	1287
	Accounts receivable (14300*98%)		14014
	Sales discount forfeited (14300*2%)		286
	(To record the accounts receivable factored)
9-jul	Accounts receivable (14300*2%)	286
	Sales discount forfeited		286
	(To record discount forfeited)
9-jul	Cash (6500*(100%-6%))	6110
	Interest expense (6500*6%)	390
	Notes payable		6500
	(To record notes payable)
11-jul	Accounts receivable - warren harding company	300
	Sales discount forfieted (15000*2%)		300
	(To record discount forfeited)
29-dec	Allowance for doubtful accounts (15000*(100%-10%))	13500
	Acconts receivable - warren harding co		13500
	(To record the accounts written off)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Presented below is information related to Vaughn Corp., which sells merchandise with terms 2/10, net 60....

Presented below is information related to Vaughn Corp., which sells merchandise with terms 2/10, net 60. Vaughn Corp. records its sales and receivables net. July 1 Vaughn Corp. sold to Warren Harding Co. merchandise having a sales price of $18,000. 5 Accounts receivable of $14,800 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 8%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the...

presented below is information related to James Garfield Corp., which sells merchandise with terms 2/10, net...

presented below is information related to James Garfield Corp., which sells merchandise with terms 2/10, net 60. Garfield records its sales and receivables net. July 1 James Garfield Corp. sold to Warren Harding Co. merchandise having a sales price of $8,000. 5 Accounts receivable of $9,000 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past...

1. On June 3, a company sells merchandise with price of $2,000 (Terms: 2/10, net 60....

1. On June 3, a company sells merchandise with price of $2,000 (Terms: 2/10, net 60. Instructions: Prepare all the seller’s journal entries related to this sale and customer payments for both the Gross and Net methods under the following three mutually exclusive cases. Case 1: Customer settles entire receivable on June 12 Case 2: Customer settles entire receivable on July 29 Case 3: Customer settles ½ of receivable on June 12 and ½ of receivable on July 29

Presented below is information related to Ivan Calderon Corp. for the year 2020. Net sales $1,300,000...

Presented below is information related to Ivan Calderon Corp. for the year 2020. Net sales $1,300,000 Write-off of inventory due to obsolescence $80,000 Cost of goods sold 780,000 Depreciation expense omitted by accident in 2019 55,000 Selling expenses 65,000 Casualty loss 50,000 Administrative expenses 48,000 Cash dividends declared 45,000 Dividend revenue 20,000 Retained earnings at December 31, 2019 980,000 Interest revenue 7,000 Effective tax rate of 20% on all items Partially correct answer. Your answer is partially correct. Try again....

Presented below is information related to Whispering Corp. for the year 2020. Net sales $1,300,000 Write-off...

Presented below is information related to Whispering Corp. for the year 2020. Net sales $1,300,000 Write-off of inventory due to obsolescence $80,000 Cost of goods sold 780,000 Depreciation expense omitted by accident in 2019 55,000 Selling expenses 65,000 Casualty loss 50,000 Administrative expenses 48,000 Cash dividends declared 45,000 Dividend revenue 20,000 Retained earnings at December 31, 2019 980,000 Interest revenue 7,000 Effective tax rate of 20% on all items Prepare a multiple-step income statement for 2020. Assume that 60,800 shares...

Presented below is information related to Bonita Corp. for the year 2017. Net sales $1,392,100 Write-off...

Presented below is information related to Bonita Corp. for the year 2017. Net sales $1,392,100 Write-off of inventory due to obsolescence $81,030 Cost of goods sold 780,300 Depreciation expense omitted by accident in 2016 45,000 Selling expenses 74,600 Casualty loss 51,800 Administrative expenses 52,500 Cash dividends declared 41,740 Dividend revenue 27,800 Retained earnings at December 31, 2016 889,370 Interest revenue 7,120 Effective tax rate of 34% on all items 1- Prepare a multiple-step income statement for 2017. Assume that 55,620...

Presented below is information related to Skysong Corp. for the year 2017. Net sales $1,397,100 Write-off...

Presented below is information related to Skysong Corp. for the year 2017. Net sales $1,397,100 Write-off of inventory due to obsolescence $84,330 Cost of goods sold 788,400 Depreciation expense omitted by accident in 2016 40,100 Selling expenses 68,000 Casualty loss 48,600 Administrative expenses 54,500 Cash dividends declared 43,270 Dividend revenue 21,400 Retained earnings at December 31, 2016 1,028,140 Interest revenue 8,830 Effective tax rate of 34% on all items Prepare a multiple-step income statement for 2017. Assume that 62,370 shares...

Journalize the following merchandise transactions: A. Sold merchandise on account, $13,100 with terms 2/10, net 30....

Journalize the following merchandise transactions: A. Sold merchandise on account, $13,100 with terms 2/10, net 30. The cost of the merchandise sold was $7,000. B. Received payment less the discount. C. Purchased merchandise on account from a supplier for $5,600, terms 2/10, net 30. D. Returned $1,150 of the merchandise and received full credit. E. Paid for the merchandise within the discount period.

Presented below is information related to Donaldson Corp., for the year 2020. Prepare an income statement...

Presented below is information related to Donaldson Corp., for the year 2020. Prepare an income statement and answer the question below and other questions requiring the use of this income statement. Net sales $1,820,000 Cost of goods sold 1,240,000 Selling expenses 86,000 Administrative expenses 74,000 Dividend revenue 25,000 Interest revenue 20,000 Interest expense 50,000 Write-off of goodwill due to impairment 40,000 Depreciation expense omitted in 2018 105,000 Dividends declared 12,000 Effect on prior year’s of change in accounting principle (credit)...

E5-2 Information related to Duffy Co., Ltd. is presented below

E5-2 Information related to Duffy Co., Ltd. is presented below. 1. On April 5, purchased merchandise from Thomas Company, Ltd. for £25,000, terms transactions. 2/10, net/30, FOB shipping point. (LO2) 2. On April 6, paid freight costs of £900 on merchandise purchased from Thomas. 3. On April 7, purchased equipment on account for £26,000. 4. On April 8, returned damaged merchandise to Thomas and was granted a £2,600 credit for returned merchandise. 5. On April 15, paid the amount due to Thomas in full. Instructions (a) Prepare...

Subjects