MGA 301 Final: Homework_Notes
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Chamberlain Enterprises Inc. reported the following receivablesin its December 31, 2016, year-end balance sheet:
Current assets: | |||
Accounts receivable, net of $28,000 inallowance for uncollectible accounts | $ | 238,000 | |
Interest receivable | 10,700 | ||
Notes receivable | 300,000 | ||
Additional Information: |
1. | The notes receivable account consists of two notes, a $65,000note and a $235,000 note. The $65,000 note is dated October 31,2016, with principal and interest payable on October 31, 2017. The$235,000 note is dated June 30, 2016, with principal and 8%interest payable on June 30, 2017. |
2. | During 2017, sales revenue totaled $1,380,000, $1,300,000 cashwas collected from customers, and $26,000 in accounts receivablewere written off. All sales are made on a credit basis. Bad debtexpense is recorded at year-end by adjusting the allowance accountto an amount equal to 10% of year-end accounts receivable. |
3. | On March 31, 2017, the $235,000 note receivable was discountedat the Bank of Commerce. The bank's discount rate is 10%.Chamberlain accounts for the discounting as a sale.
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