On January 1, 2010, Furball Company had Accounts Receivable $98,000 and Allowance for Doubtful Accounts $8,100. Furball Company prepares financial statements annually. During the year the following selected transactions occurred.
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Jan. 5 |
Sold $10,800 of merchandise to Kandle Company, terms n/30. |
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Feb. 2 |
Accepted a $10,800, 4 month, 10% promissory note from Kandle Company for the balance due. |
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12 |
Sold $13,500 of merchandise to Lowe Company and accepted Lowe’s $13,500, 2 month, 10% note for the balance due. |
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26 |
Sold $7,000 of merchandise to Barrel Co., terms n/10. |
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Apr. 5 |
Accepted a $7,000, 3 month, 8% note from Barrel Co. for the balance due. |
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12 |
Collected Lowe Company note in full. |
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June 2 |
Collected Kandle Company note in full. |
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July 5 |
Barrel Co. dishonors its note of April 5. It is expected that Barrel will eventually pay the amount owed. |
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15 |
Sold $12,000 of merchandise to Bushel Co. and accepted Bushel’s $12,000, 3 month, 12% note for the amount due. |
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Oct. 15 |
Bushel Co.’s note was dishonored. Bushel Co. is bankrupt, and there is no hope of future settlement. |