Question

Upham Company’s June 30, 2016, balance sheet included the following information:

Upham Company

Partial Balance Sheet

June 30, 2016

1	Accounts Receivable	$248,000.00
2	Less: Allowance for Doubtful Accounts	(14,400.00)	$233,600.00
3	Notes Receivable		21,400.00
4	Total Receivables		$255,000.00
5	* The company has a recourse liability of $2,450 for notes receivable sold with recourse.

During the company’s fiscal year ending June 30, 2017, the following transactions occurred:

1.	Sales on credit	$870,400
2.	Collections of accounts receivable	842,800
3.	Accounts receivable written off as uncollectible	13,500
4.	Customer notes received in payment of accounts receivable	71,500
5.	Notes receivable collected	26,500
6.	Notes receivable, previously sold with recourse, were paid at maturity. The associated recourse liability for this note is $650.	35,000
7.	Notes receivable were defaulted	2,025
8.	Collections on accounts previously written off	400
9.	Bad debts were estimated to be 1.5% of credit sales

	Required:
1.	Prepare the journal entries necessary for Upham to record the preceding transactions.
2.	Prepare an analysis and schedule that shows the amounts of the accounts receivable, allowance for doubtful accounts, notes receivable, and notes receivable dishonored accounts that will be disclosed on Upham’s June 30, 2017, balance sheet.

CHART OF ACCOUNTSUpham CompanyGeneral Ledger

	ASSETS
111	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
125	Notes Receivable
126	Notes Receivable Dishonored
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
215	Recourse Liability
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
601	Loss from Sale of Receivables
910	Income Tax Expense

Prepare the journal entries necessary for Upham to record the transactions for fiscal year ended June 30, 2017. Additional Information

PAGE 20

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
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Complete the schedule that shows the amounts of the accounts receivable, allowance for doubtful accounts, notes receivable, and notes receivable dishonored accounts that will be disclosed on Upham’s June 30, 2017, balance sheet. Additional Information

Upham Company

Partial Balance Sheet

June 30, 2017

1	Accounts Receivable
2	Less: Allowance for Doubtful Accounts
3	Notes Receivable
4	Notes Receivable Dishonored
5	Total Receivables

Answer 1

	Account Title	Debit	Credit
1	Accounts Receivable	$ 870,400.00
	To Sales Revenue		$ 870,400.00
2	Cash	$ 842,800.00
	To Accounts Receivable		$ 842,800.00
3	Allowance for Doubtful Accounts	$    13,500.00
	Accounts Receivable		$    13,500.00
4	Notes Receivable	$    71,500.00
	Accounts Receivable		$    71,500.00
5	Cash	$    26,500.00
	To Notes Receivable		$    26,500.00
6	Loss from Sale of Receivables	$          650.00
	To Recourse Liability		$          650.00
7	Notes Receivable Dishonored	$      2,025.00
	To Notes Receivable		$      2,025.00
8	Accounts Receivable	$          400.00
	To Allowance for Doubtful Accounts		$          400.00
9	Cash	$          400.00
	ToAccounts Receivable		$          400.00
10	Bad Debt Expense	$    11,756.00
	To Allowance for Doubtful Accounts		$    11,756.00

1	Accounts Receivable	$ 190,600.00
2	Less: Allowance for Doubtful Accounts	$ (11,756.00)	$ 178,844.00
3	Notes Receivable		$    64,375.00
3	Notes Receivable Dishonored		$      2,025.00
3	Total Receivables		$ 245,244.00