accounting for uncollectible accounts aging of accounts method card sales notes rece 643844

2011

Jul 1

Sold inventory to Go – Mart, receiving a $37,000,

nine month, 8% note. Ignore cost of goods sold.

Oct 31

Recorded credit and debit card sales for the period of $19,000.

Nov 3

Card processor drafted company’s checking account for

processing fee of $420.

Dec 31

Made an adjusting entry to accrue interest on the Go – Mart note.

31

Made an adjusting entry to record uncollectible account

expense based on an aging of accounts receivable. The

aging schedule shows that $14,100 of accounts receivable

will not be collected. Prior to this adjustment, the credit

balance in Allowance for uncollectible accounts is $10,200.

2012

Apr 1

Collected the maturity value of the Go – Mart note.

Jun 23

Sold merchandise to Appeal, Corp., receiving a 60 day, 12%

note for $7,000. Ignore cost of goods sold.

Aug 22

Appeal, Corp., dishonored its note (failed to pay) at maturity;

we converted the maturity value of the note to an account receivable.

Nov 16

Loaned $23,000 cash to Creed, Inc., receiving a 90 day, 16% note.

Dec 5

Collected in full on account from Appeal, Corp.

31

Accrued the interest on the Creed, Inc., note.