Q2: Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC (IT) for $300,000 due within 30 days of successful testing of the system. Testing was completed on 30 April and the software became operational. JT paid an amount of $120,000 on 15 May. JT had to settle another large liability in April which resulted in it not being able to pay the remaining invoice amount (i.e. $180,000) by 30 May. On 1 June, JT CFO convinced SS finance team to accept a note receivable due within 60 days carrying interest rate of 5% per annum for the remaining outstanding balance. JT paid the interest and principal of the note receivable at its maturity Required: Journalize the transactions. Q 2 :Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC(JT) for $300,000 due within 30 days of successful testing of the system. Testingwas completed on 30 April and the software became operational. JT paid anamount of $120,000 on 15 May.JT had to settle another large liability in April which resulted in it not being able topay the remaining invoice amount (i.e. $180,000) by 30 May. On 1 June, JT CFOconvinced SS finance team to accept a note receivable due within 60 days carryinginterest rate of 5% per annum for the remaining outstanding balance. JT paid theinterest and principal of the note receivable at its maturity.Required: Journalize the transactions.

An accounting cycle refers to the different stages in the preparation of the final accounts. Final…

Answered: Q2: Scarlet Systems, Inc. (SS)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Q2: Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC (IT) for $300,000 due within 30 days of successful testing of the system. Testing was completed on 30 April and the software became operational. JT paid an amount of $120,000 on 15 May. JT had to settle another large liability in April which resulted in it not being able to pay the remaining invoice amount (i.e. $180,000) by 30 May. On 1 June, JT CFO convinced SS finance team to accept a note receivable due within 60 days carrying interest rate of 5% per annum for the remaining outstanding balance. JT paid the interest and principal of the note receivable at its maturity Required: Journalize the transactions.

Q 2 :
Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC
(JT) for $300,000 due within 30 days of successful testing of the system. Testing
was completed on 30 April and the software became operational. JT paid an
amount of $120,000 on 15 May.
JT had to settle another large liability in April which resulted in it not being able to
pay the remaining invoice amount (i.e. $180,000) by 30 May. On 1 June, JT CFO
convinced SS finance team to accept a note receivable due within 60 days carrying
interest rate of 5% per annum for the remaining outstanding balance. JT paid the
interest and principal of the note receivable at its maturity.
Required: Journalize the transactions.

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