E6-2, e6-7, e6-8 and e6-18
E6-2
Determine due date and interest on notes
Obj|1
✓ Feb. 20, $450
Determine the due date and the amount of interest due at maturity on the following notes:
|
Date of Note |
Face Amount |
Interest Rate |
Term of Note |
|
|
a. |
January 6 |
$40,000 |
9% |
45 days |
|
b. |
March 23 |
9,000 |
10 |
60 days |
|
c. |
May 30 |
12,000 |
12 |
90 days |
|
d. |
August 30 |
18,000 |
10 |
120 days |
|
e. |
October 1 |
10,500 |
8 |
60 days |
E6-7
Estimating doubtful accounts
Obj|4
Newbury Bikes Co. is a wholesaler of motorcycle supplies. An aging of the company’s accounts receivable on December 31, 2012, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Age Interval Balance Percent Uncollectible
Not Past Due $667,000 ½%
1 – 30 Days past due 158,000 2
31 -60 Days past due 54,000 5
61 -90 Days past due 20,000 15
91 -180 Days past due 15,000 40
Over 180 Days past due 10,500 75
$925,000
Estimate what the balance of the allowance for doubtful accounts should be as of December 31, 2012.
E6-8
Entry for uncollectible accounts
Obj|4
Using the data in Exercise 6-7, assume that the allowance for doubtful accounts for Newbury Bikes Co. had a negative balance of 2$3,800 as of December 31, 2012.
Illustrate the effects of the adjustment for uncollectible accounts as of December 31, 2012, on the accounts and financial statements
| E6-18 | Lower of cost or market inventory | ||||||
| On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9. | |||||||
| Unit | Unit | ||||||
| Inventory | Cost | Market | |||||
| Commodity | Quantity | Price | Price | ||||
| Buffalo | 35 | $115 | $120 | ||||
| Dakota | 67 | 90 | 75 | ||||
| Frontier | 8 | 300 | 280 | ||||
| Midwest | 83 | 40 | 30 | ||||
| Rainbow | 100 | 90 | 94 | ||||