Weldon Corporation's fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021: Mar. 17 Accounts receivable of $3,600 were written off as uncollectible. The company uses the allowance method. 30 Loaned an officer of the company $42,eee and received a note requiring principal and interest at 5% to be paid on March 30, 2022. May 30 Discounted the $42,eee note at a local bank. The bank's discount rate is 6%. The note was discounted without recourse and the sale criteria are met. June 30 Sold merchandise to the Blankenship Company for $31,808. Terms of the sale are 2/10, n/38. Weldon uses the grass method to account for cash discounts. July 8 The Blankenship Company paid its account in full. Aug. 31 Sold stock in a nonpublic company with a book value of $6,900 and accepted a $7,900 noninterest-bearing note with a discount rate of 6%. The $7,980 payment is due on February 28, 2022. The stock has no ready market value. Dec. 31 Meldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 3% of the gross accounts receivable balance of $988,000. The allowance had a balance of $31,000 at the start of 2021. Required: 1 & 2. Prepare journal entries for each of the above transactions and additional year-end adjusting entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate Ls calculations and round your final answers to nearest whole dollar)
Weldon Corporation's fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021: Mar. 17 Accounts receivable of $3,600 were written off as uncollectible. The company uses the allowance method. 30 Loaned an officer of the company $42,eee and received a note requiring principal and interest at 5% to be paid on March 30, 2022. May 30 Discounted the $42,eee note at a local bank. The bank's discount rate is 6%. The note was discounted without recourse and the sale criteria are met. June 30 Sold merchandise to the Blankenship Company for $31,808. Terms of the sale are 2/10, n/38. Weldon uses the grass method to account for cash discounts. July 8 The Blankenship Company paid its account in full. Aug. 31 Sold stock in a nonpublic company with a book value of $6,900 and accepted a $7,900 noninterest-bearing note with a discount rate of 6%. The $7,980 payment is due on February 28, 2022. The stock has no ready market value. Dec. 31 Meldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 3% of the gross accounts receivable balance of $988,000. The allowance had a balance of $31,000 at the start of 2021. Required: 1 & 2. Prepare journal entries for each of the above transactions and additional year-end adjusting entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate Ls calculations and round your final answers to nearest whole dollar)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:Weldon Corporation's fiscal year ends December 31. The following is a list of transactions involving receivables that occurred
during 2021:
Mar. 17 Accounts receivable of $3,600 were written off as uncollectible. The company uses the allowance method.
38 Loaned an officer of the company $42,eee and received a note requiring principal and interest at 5% to be paid on March
30, 2822.
May 30 Discounted the $42,eee note at a local bank. The bank's discount rate is 6%. The note was discounted without recourse
and the sale criteria are met.
June 30 Sold merchandise to the Blankenship Company for $31,808. Terms of the sale are 2/10, n/38. Weldon uses the gross method
to account for cash discounts.
July 8 The Blankenship Company paid its account in full.
Aug. 31 Sold stock in a nonpublic company with a book value of $6,900 and accepted a $7,900 noninterest-bearing note with a
discount rate of 6%. The $7,980 payment is due on February 28, 2022. The stock has no ready market value.
Dec. 31 Weldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 3% of
the gross accounts receivable balance of $988,00e. The allowance had a balance of $31,000 at the start of 2021.
Required:
1 & 2. Prepare journal entries for each of the above transactions and additional year-end adjusting entries indicated. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate
L
calculations and round your final answers to nearest whole dollar.)
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