account titles and enter 0 for the amounts. Credit account titles are
automatically indented when the amount is entered. Do not indent
manually. Record journal entries in the order presented in the problem.)
Exercise 7-4 Your accounts receivable clerk, Mitra Adams, to whom
you pay a salary of $3,255 per month, has just purchased a new Acura.
You decide to test the accuracy of the accounts receivable balance of
$177,940 as shown in the ledger. The following information is available
for your first year in business. (1) Collections from customers $429,660
(2) Merchandise purchased 694,400 (3)
Ending merchandise
inventory 195,300 (4)
Goods are marked to sell at 40% above cost
Compute an estimate of the ending balance of accounts receivable
from customers that should appear in the ledger and any apparent
shortages. Assume that all sales are made on account. Exercise 7-9 The
trial balance before adjustment of Buffalo Inc. shows the following
balances. Give the entry for estimated bad debts assuming that the
allowance is to provide for doubtful accounts on the basis of (a) 5% of
gross accounts receivable and (b) 6% of gross accounts receivable and
Allowance for Doubtful Accounts has a $1,731 credit balance. Exercise
7-22 Sheridan, Inc. decided to establish a petty cash fund to help ensure
internal control over its small cash expenditures. The following
information is available for the month of April. 1. On April 1, it
established a petty cash fund in the amount of $249. 2. A summary of
the petty cash expenditures made by the petty cash custodian as of April
10 is as follows. Delivery charges paid on merchandise purchased $73
Supplies purchased and used
38 Postage expense 46 I.O.U. from
employees 30 Miscellaneous expense 49 The petty cash fund was
replenished on April 10. The balance in the fund was $7. 3. The petty
cash fund balance was increased by $113 to $362 on April 20. Prepare
the journal entries to record transactions related to petty cash for the
month of April. Exercise 7-24 (Part Level Submission) Swifty Lansbury
Company deposits all receipts and makes all payments by check. The
following information is available from the cash records. Prepare a bank
reconciliation going from balance per bank and balance per book to
correct cash balance. Concept for Analysis 7-2 (Essay) Kimmel
Company uses the net method of accounting for sales discounts. Kimmel