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Accounts and Notes Receivable Lenox Corp. sold merchandise for $6.300 to M. Baxter on May 15, 2017, with payment due in 65 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2017, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2017, Baxter sent Lenox a check for $1,100 and offered to sign a two-month, 15%, $5,200 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2018. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: Identify and analyze all transactions on the books of Lenox Corp. from May 15, 2017, to January 31, 2018. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. The effect of the sale transaction on May 15. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets Statement(s) The effect of the transaction to write off the account on August 10. Activity Accounts Liabilities Assets Balance Sheet Stockholders' Equity Liabilities Revenues How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Stockholders' Equity Revenues Expenses Income Statement = Expenses Net Income Net Income

Accounts and Notes Receivable Lenox Corp. sold merchandise for $6.300 to M. Baxter on May 15, 2017, with payment due in 65 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2017, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2017, Baxter sent Lenox a check for $1,100 and offered to sign a two-month, 15%, $5,200 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2018. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: Identify and analyze all transactions on the books of Lenox Corp. from May 15, 2017, to January 31, 2018. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. The effect of the sale transaction on May 15. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets Statement(s) The effect of the transaction to write off the account on August 10. Activity Accounts Liabilities Assets Balance Sheet Stockholders' Equity Liabilities Revenues How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Stockholders' Equity Revenues Expenses Income Statement = Expenses Net Income Net Income

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accounts and Notes Receivable Lenox Corp. sold merchandise for $6,300 to M. Baxter on May 15, 2017, with payment due in 65 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2017, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2017, Baxter sent Lenox a check for $1,100 and offered to sign a two-month, 15%, $5,200 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2018. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: Identify and analyze all transactions on the books of Lenox Corp. from May 15, 2017, to January 31, 2018. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. The effect of the sale transaction on May 15. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Activity Accounts Assets The effect of the transaction to write off the account on August 10. Statement(s) Liabilities Assets Balance Sheet + Liabilities Stockholders' Equity Revenues How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Stockholders Equity Revenues Expenses Income Statement = Expenses Net Income Net Income
Transcribed Image Text:Accounts and Notes Receivable Lenox Corp. sold merchandise for $6,300 to M. Baxter on May 15, 2017, with payment due in 65 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2017, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2017, Baxter sent Lenox a check for $1,100 and offered to sign a two-month, 15%, $5,200 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2018. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: Identify and analyze all transactions on the books of Lenox Corp. from May 15, 2017, to January 31, 2018. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. The effect of the sale transaction on May 15. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Activity Accounts Assets The effect of the transaction to write off the account on August 10. Statement(s) Liabilities Assets Balance Sheet + Liabilities Stockholders' Equity Revenues How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Stockholders Equity Revenues Expenses Income Statement = Expenses Net Income Net Income
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