Presented below is information from Lopez Computers Incorporated.

Presented below is information from Lopez Computers Incorporated.
July Sold $26,100 of computers to Smallwood Company with terms 3/15, n/60. Lopez uses
1 the gross method to record cash discounts.
10 Lopez received payment from Smallwood for the full amount owed from the July
transactions.
17 Sold $254,400 in computers and peripherals to The Clark Store with terms of 2/10, n/30.
30 The Clark Store paid Lopez for its purchase of July 17.
Prepare the necessary journal entries for Lopez Computers. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually.)

Exercise 7-23
The petty cash fund of Teasdale’s Auto Repair Service, a sole proprietorship, contains the
following.
1.
2.
3.
4.
5.

Coins and currency
Postage stamps
An I.O.U. from Richie Cunningham, an employee, for cash advance
Check payable to Teasdale’s Auto Repair from Pottsie Weber, an employee, marked NSF
Vouchers for the following:
Stamps
Two Rose Bowl tickets for Nick Teasdale
Printer cartridge

$11
9
41
35
$ 21.28
187.10
15.63

224
$321

The general ledger account Petty Cash has a balance of $323.
Prepare the journal entry to record the reimbursement of the petty cash fund. (Round all answers
to 2 decimal places E.g. $3.76. Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)

Exercise 7-25
Aragon Company has just received the August 31, 2012, bank st
summarized below.
County National Bank

Disbursement

Balance, August 1
Deposits during August
Note collected for depositor, including
$57 interest
Checks cleared during August
Bank service charges
Balance, August 31

The general ledger Cash account contained the following entries

Balance, August 1
Receipts during August

Cash
14,432 Disbursements in August
50,260

Deposits in transit at August 31 are $5,457, and checks outstand
$2,226. Cash on hand at August 31 is $445. The bookkeeper imp
in the books at $147.50 which was written for $174.50
bank during the month of August.

(a) Prepare a bank reconciliation dated August 31, 2012, procee
ARAGON COMPANY
Bank Reconciliation, August 31, 2012
County National Bank
$
Add:

$

Deduct
:
$
$
Add:
Deduct
:

$

$

(b) Prepare any entries necessary to make the books correct and
titles are automatically indented when the amount is entered. D
No. Account Titles and Explanation
1.

(To record collection of note and interest)
2.
(To record August bank charges)
3.
(To record error in recording check for supplies)

(c) What amount of cash should be reported in the August 31 ba

Problem 7-2
Presented below are a series of unrelated situations.

Answer the questions relating to each of the five independen

1. Halen Company’s unadjusted trial balance at December 3
Debit
Allowance for doubtful accounts
Net sales

$4,790

Halen Company estimates its bad debt expense to be
expense for 2012.
Bad debt expense for
2012

$

2. An analysis and aging of Stuart Corp. accounts receivable
following.
Amounts estimated to be uncollectible
Accounts receivable
Allowance for doubtful accounts (per books)

What is the net realizable value of Stuart’s receivables at De
The net realizable
value

$

3. Shore Co. provides for doubtful accounts based on
available for 2012.

Credit sales during 2012
Allowance for doubtful accounts 1/1/12
Collection of accounts written off in prior years (customer c
Customer accounts written off as uncollectible during 2012
What is the balance in Allowance for Doubtful Accounts at
The balance in Allowance for Doubtful Accounts

4. At the end of its first year of operations, December 31, 20
information.
Accounts receivable, net of allowance for doubtful
accounts
Customer accounts written off as uncollectible during
2012
Bad debt expense for 2012

What should be the balance in accounts receivable at Decem
allowance for doubtful accounts?

Accounts receivable, before deducting allowance for doubtf
accounts

5. The following accounts were taken from Bullock Inc.’s tr
Debit
Net credit sales

Allowance for doubtful accounts
Accounts receivable

$12,700
311,000

If doubtful accounts are 4% of accounts receivable, determi
2012.
The bad debt expense, as
adjusted
Click if you would like to Show Work for this question:

Problem 7-6
The balance sheet of Starsky Company at December 31, 2012, in
Notes receivable
Accounts receivable
Less: Allowance for doubtful accounts

$

Transactions in 2012 include the following.
1
.
2
.
3
.
4
.

Accounts receivable of $ 152,600 were collected including
which 2 % sales discounts were allowed.
$ 5,810 was received in payment of an account which was w
worthless in 2012.
Customer accounts of $ 20,490 were written off during the

At year-end, Allowance for Doubtful Accounts was estimate
28,120 . This estimate is based on an analysis of aged accou

Prepare all journal entries necessary to reflect the transactions ab
are automatically indented when the amount is entered. Do no
Account Titles
No.

and
Explanation

1.

Debit

2.
(To reinstate the
accounts
receivable)

(To record the
collection on
account)
3.
4.
Click if you would like to Show Work for this
question:

Exercise 8-16
Presented below is information related to radios for the Couples Company for th
July.

Date
July
1
6

Tra
nsac
tion
Bala
nce
Purc
hase

7

Sale

10

Sale

Unit
s In
150
1,20
0

12

Purc
hase

15

Sale

18

Purc
hase

22

Sale

25

Purc
hase

30

Sale

600

450

750

To
tals

3,15
0

(a1)
Calculate average cost per unit. (Round average cost per unit to
$2.76.)
Weighted average cost $

Exercise 8-17
The following is a record of Cannondale Company’s transactions for Boston Teapots for the
month of May 2012.
Ma
y1
12

Bal
anc
e
Pur

550
Ma
unit @ $21
y 10
s
825 @ $24 20

Sale
Sale

413
unit @ $35
s
811 @ $35

28

cha
se
Pur
cha
se

unit
s
550
unit @ $29
s

unit
s

(a)
Assuming that perpetual inventories are not maintained and that
of the month shows 701 units on hand, what is the cost of the en
and LIFO?
FIFO
Ending
Inventory

LIFO
$

$

Problem 8-3
Some of the transactions of Torres Company during August are
periodic inventory method.

August Purchased merchandise on account, $23,300, terms
10
13 Returned part of the purchase of August 10, $1,200,
account.
15 Purchased merchandise on account, $28,100, terms
25 Purchased merchandise on account, $35,400, terms 2
28 Paid invoice of August 15 in full.

(a) Assuming that purchases are recorded at gross amounts and t
recorded when taken:

(1) Prepare general journal entries to record the transactions.
automatically indented when amount is entered. Do not indent
Date

Account Titles and Explanation

Aug. 10
Aug. 13
Aug. 15
Aug. 2
5
Aug. 2
8

(b) Assuming that purchases are recorded at net amounts and tha
as financial expenses:

(1) Prepare general journal entries to enter the transactions.
automatically indented when amount is entered. Do not indent
Date
Aug. 10
Aug. 13
Aug. 15
Aug. 2
5
Aug. 2

Account Titles and Explanation

8

(2) Prepare the adjusting entry necessary on August 31 if financi
prepared at that time. (Credit account titles are automatically in
entered. Do not indent manually.)
Account Titles and
Explanation

Debit

Click if you would like to Show Work for this
question:

Problem 8-4
Hull Company’s record of transactions concerning part X for the month of April was as
follows.
Purc
hases
April
1
4
11
18
26
30

Sales
(bala
nce
on
hand)

200 @
500
400
300
700
300

@
@
@
@
@

$6.80
6.90
7.20
7.30
7.60
7.90

April
5

400

12
27
28

300
1,000
150

(a1)
Calculate average cost per unit. (Round average cost per unit to
$2.7621.)
Average cost per unit