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Friday, August 6, 2010

Valix Finacc vol 1 Problem 6- 5

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 6-5


May  1  Accounts receivable – assigned                                             800,000
                      Accounts receivable                                                                             800,000

         1  Cash (640,000 – 20,000)                                                           620,000
              Service charge                                                                        20,000
                      Note payable – bank                                                                            640,000

         5   Sales return                                                                              30,000
                      Accounts receivable – assigned                                                                         30,000

       10   Cash                                                                                      490,000
               Sales discount (2% x 500,000)                                                              10,000
                      Accounts receivable – assigned                                                                       500,000

June  1   Note payable – bank                                                            490,000
               Interest expense (2% x 640,000)                                               12,800
                      Cash                                                                                                      502,800

          7   Allowance for doubtful accounts                                          10,000
                       Accounts receivable – assigned                                                            10,000

        20   Cash                                                                                     200,000
                       Accounts receivable – assigned                                                          200,000

July    1   Note payable – bank (640,000 – 490,000)                             150,000
                Interest expense (2% x 150,000)                                                3,000
                        Cash                                                                                                    153,000

           1   Accounts receivable                                                             60,000
                        Accounts receivable – assigned                                                           60,000

                Accounts receivable – assigned                                                                 800,000
                Less: Collections                                                                              690,000
                         Sales discount                                                               10,000
                         Sales return                                                                   30,000
                         Worthless accounts                                                     10,000            740,000
                Balance                                                                                                         60,000

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