E7-4 Kieschnick Company has a balance in its Accounts Receivable control account of $10,000 on January 1, 2017. The subsidiary ledger contains three accounts: Bixler Com pany, balance $4,000; Cuddyer Company, balance $2,500; and Freeze Company. During January, the following receivable-related transactions occurred. Credit Sales Collections Returns Bixler Company Cuddyer Company Freeze Company $9,000 7,000 8,500 $8,000 2,500 $-0- 3,000 9,000 -0- Instructions (a) What is the January 1 balance in the Freeze Company subsidiary account? (b) What is the January 31 balance in the control account? (c) Compute the balances in the subsidiary accounts at the end of the month. (d) Which January transaction would not be recorded in a special journal?

E7-4 Kieschnick Company has a balance in its Accounts Receivable control account of $10,000 on January 1, 2017. The subsidiary ledger contains three accounts: Bixler Com pany, balance $4,000; Cuddyer Company, balance $2,500; and Freeze Company. During January, the following receivable-related transactions occurred. Credit Sales Collections Returns Bixler Company Cuddyer Company Freeze Company $9,000 7,000 8,500 $8,000 2,500 $-0- 3,000 9,000 -0- Instructions (a) What is the January 1 balance in the Freeze Company subsidiary account? (b) What is the January 31 balance in the control account? (c) Compute the balances in the subsidiary accounts at the end of the month. (d) Which January transaction would not be recorded in a special journal?

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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Use the following information about a company's receivable transactions to determine relevant balances. * Account balances at 1/1/x2 Accounts receivable $100,000 Allowance for doubtful accounts 7,000 Allowance for sales returns 2,000 During the year, 20x2, the company had the following transactions related to receivables: • Credit sales revenue of $350,000 recorded. • Cash collections from accounts of $370,000. • Customer account write-offs in the amount of $10,000 • Customer returns of credit sales in the amount of $3,500. • Bad debt expense of $5,000 recorded at the end of the period. • The company estimates sales returns at 2% of credit sales revenue for the period. Determine the net realizeable value of receivables at the end of the year as disclosed on the balance sheet.
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