Accounting for Receivables

Tutorial-7

Exercise 2

Record the following transactions for Adcock Company.

1- On April 12, sold $11,000 of merchandise to Milton Inc. terms 2/10,n/30.

2- On April 15, Milton returned $2,000 of merchandise.

3- On April 22, Milton paid for the merchandise.

Exercise 3

(a) On January 6, Whitson Co. sells merchandise on account to Garcia Inc. for
$7,000, terms 2/10,n/30. On January 16, Garcia Inc. pays the amount due.
Prepare the entries on Whitson's books to record the sale and related
collection.

(b) On January 10, Jill Hoyle uses her Berkman Co. credit card to purchase
merchandise from Berkman Co. for $9,000. On February 10, Hoyle is billed
for the amount due of $9,000. On February 12, Hoyle pays $4,000 on the
balance due. On March 10, Hoyle is billed for the amount due, including
interest at 2% per month on the unpaid balance as of February 12. Prepare
the entries on Berkman Co. books related to the transactions that occurred
on January 10, February 12, and March 10.