ceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30 of the current year: April 10 Received an order from Peter’s Appliances, a wholesaler, for 10 machines. April 30 Sold 15 machines to Yuri Inc. on credit. May 1 The purchasing manager of Peter’s Appliances visited IceKreme’s factory and purchased 12 machines on credit, instead of the 10 machines that were previously ordered. May 5 Yuri Inc. paid for the machines purchased on April 30. May 7 Sold 2 machines to Cheng Ltd. on credit. May 10 Wrote off $12,300 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1 of the current year. May 10 Peter’s Appliances paid the amount due to IceKreme. June 30 Recovered $3,150 from the receivables that were written off on May 10. Additional information is as follows: IceKreme sold all machines at $11,500 per unit. All of IceKreme’s sales were on credit with terms n/30. IceKreme’s records included the following items and their balances as at March 31 of the current year: Accounts receivable $ 66,000 Allowance of doubtful accounts (credit balance) 16,500 Net sales 675,000

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter9: Accounting For Purchases And Cash Payments

Section: Chapter Questions

Problem 1CP

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Question

ceKreme Inc. makes ice cream machines for sale to ice cream parlours. The following events occurred between April 1 and June 30 of the current year:

April	10	Received an order from Peter’s Appliances, a wholesaler, for 10 machines.
April	30	Sold 15 machines to Yuri Inc. on credit.
May	1	The purchasing manager of Peter’s Appliances visited IceKreme’s factory and purchased 12 machines on credit, instead of the 10 machines that were previously ordered.
May	5	Yuri Inc. paid for the machines purchased on April 30.
May	7	Sold 2 machines to Cheng Ltd. on credit.
May	10	Wrote off $12,300 of accounts receivable that were considered uncollectible. These receivables relate to sales made prior to April 1 of the current year.
May	10	Peter’s Appliances paid the amount due to IceKreme.
June	30	Recovered $3,150 from the receivables that were written off on May 10.

Additional information is as follows:

IceKreme sold all machines at $11,500 per unit.
All of IceKreme’s sales were on credit with terms n/30.
IceKreme’s records included the following items and their balances as at March 31 of the current year:


Accounts receivable	$	66,000
Allowance of doubtful accounts (credit balance)		16,500
Net sales		675,000

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