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Chapter 7: 8QS_1 (page 343)

On August 2, Jun Co. receives a \(6,000, 90-day, 12% note from customer Ryan Albany as payment on his \)6,000 account.

  1. Compute the maturity date for this note.

Short Answer

Expert verified

The note's maturity date depicts the expiry date after which the payment note will be declared invalid to both the parties for which the note is being issued for payment.

Step by step solution

01

Maturity date for this note

The maturity date for this note will be on October 31.

02

Working notes

The total number of days the note is valid is 90 days (given)

The number of days from August 2 till September 2 will be 31 days

The number of days from September 2 till October 2 will be 30 days

The remaining 29 days added to the October 2 will lead to the maturity date of October 31.

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Most popular questions from this chapter

Hovak Company has credit sales of \(4,500,000 for year 2017. At December 31, 2017, the company’s Allowance for Doubtful Accounts has an unadjusted debit balance of \)3,400. Hovak prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.

Required

2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.

At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(1,905,000

Credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,682,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . \)1,270,100 debit

Allowance for doubtful accounts . . . . . . . . . . . . . 16,580 debit

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a

Refer to the December 31, 2015, financial statements of Samsung in Appendix A. Does Samsung report its accounts receivable, titled as “Trade Receivables,” as a current or noncurrent asset?

Warner Company’s year-end unadjusted trial balance shows accounts receivable of \(99,000, allowance for doubtful accounts of \)600 (credit), and sales of \(280,000. Uncollectibles are estimated to be 1.5% of accounts receivable.

2. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of \)300?

Solstice Company determines on October 1 that it cannot collect $50,000 of its accounts receivable from its customer P. Moore. It uses the direct write-off method to record this loss as of October 1. On October 30, P. Moore unexpectedly paid his account in full to Solstice Company. Record Solstice’s entry(ies) to reflect recovery of this bad debt.
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