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ACC- P8-7A Giraldi Enterprises & P8-8A Kolton Company




Question;P8-7A: The President of Giraldi Enterprises asks if you could indicate the impact certain transactions have on the following ratios:Transaction Current Ratio (2:1) Accounts Receivable Turnover (10x) Average collection period (36.5 days)1] Received %5,000 on cash sale.The cost of goods sold was $2,6002] Recorded bad debt expense of $500using allowance method.3] Wrote off a $100 account receivable asuncollectible (uses allowance method.)4] Recorded $2,500 sales on account.The cost of the good sold was $1,500.Instructions: Complete the table, indicating whether each transaction will increase (I), decrease (D), or have no effect (NE) on the specific ratios provided for Giraldi Enterprises.______________________________________________________________________________________________________________________P8-8AKolton Copany closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $23,800. Notes Receivable include the following.Date Maker Face Value Term Maturity Date Interest RateApril 21 Booth Inc. $ 6,000 90 days July 20 8%May 25 Mannling Co 7,800 60 days July 24 10%June 30 ANF Corp 10,000 6 months December 31 6%During July, the following transactions were completed.July 5 Made sale of $4,500 on Kolton credit cards,14 Made sale of $600 on Visa credit cards, The credit card service charge i2 3 Received payment in full from Booth Inc. in the amount due.24 Received payment in full from manning Co. on the amount due.Instructions:[1] Journalize the July transactions and the July 31 adjusting entry for accrued interest receivable. (Interest is computed using 360 days, omit cost ofgoods sold entries.[2] Enter the balance at July 1 in the receivable accounts and post the entries to all of the receivable accounts. (Use T-accounts.)[3] Show the balance sheet presentation of


Paper#42728 | Written in 18-Jul-2015

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