Acc Week 2

E8-5 Hachey Company has accounts receivable of $95,100 at attest 31, 2007. An analysis
of the accounts shows these amounts.
effectuate entries for recognizing
accounts receivable.
(SO 2)
Balance, March 31
Month of Sale 2007 2006
March $65,000 $75,000
February 12,600 8,000
December and January 10,100 2,400
November and October 7,400 1,100
$95,100 $86,500
Credit scathe are 2/10, n/30. At March 31, 2007, thither is a $2,200 credit balance in Allowance
for Doubtful Accounts preliminary to adjustment. The familiarity uses the percentage of
receivables basis for estimating uncollectible accounts. The companys estimates of shitty
debts are as shown on page 402.
Prepare entries for recognizing
accounts receivable.
(SO 2)
Prepare entries to record
allowance for doubtful
accounts.
(SO 3)
Journalize receivables
transactions.
(SO 2, 3)
Determine bad debt expense,
and prepare the adjusting
entry.
(SO 3)
402 CHAPTER 8 coverage and Analyzing Receivables
Estimated Percentage
Age of Accounts Uncollectible
Current 2%
130 years ultimo due 7
3190 days past due 30
Over 90 days 50
Instructions
(a) Determine the aggregate estimated uncollectibles.
(b) Prepare the adjusting entry at March 31, 2007, to record bad debts expense.




(c) Discuss the implications of the changes in the aging schedule from 2006 to 2007.
E9-9 Optix International is considering a hearty expansion to its product line. The
sales force is excited about the opportunities that the new products will bring. The new
products are a significant step up in quality above the companys current offerings, but
offer a complementary check into to its existing product line. Frank Renolds, senior production
department manager, is actually excited about the high-tech new equipment that will pay off to
be acquired to produce the new products. Carol Fischer, the companys CFO, has provided
the following projections based on results with and without the new products.
Without sore Products With New Products
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