On December 31, 2016, Price Company recorded the journal entriesrequired for items
1, On December 31, 2016, Price received $9,000 for an annualinterest payment on Williams Company bonds that mature in 4 years.The 6% bonds have a face value of $150,000 were purchased to yield8%. The current balance in the Discount on bond investment accountis $7,731. Price classified this investment as held-to-maturity andused the effective interest method. The fair value of the bonds atyear-end was $170,000. Note: It is not necessary to computethe price/present value of the bond investment.
2, On December 31, 2016, Price received $47,000from the sale of 100 tablet devices. Each tablet came with6-monthsof tech support and service beginning on January 1, 2017. Thestand-alone selling prices are: tablet, $450 per device; techsupport, $50 per tablet. COGS related to this sale is included initem #5.
3, On December 31, 2016, Price recorded bad debt expense usingthe allowance method. At the beginning of2016, the balances inAccounts Receivable and Allowance for Uncollectible Accounts were$1,000,000 and$50,000 (credit), respectively. In 2016, Pricerecorded net credit sales of $5,000,000 and cash collections of$4,700,000. Actual uncollectible accounts receivable written off in2016 were $100,000. Price estimated uncollectible accounts to be 5%of year-end Accounts Receivable.
4, On December 31, 2016, Price recorded interest on a 3-year,$100,000 noninterest-bearing note using the effective interestmethod. Price received the note from a customer on January 1, 2016.The effective interest rate was 10%.
5. On December 31, 2016, Price the cost of goods sold entry forthe periodic recordkeeping system. Price used the FIFO inventorymethod and had 6,000 units left in ending inventory. The followinginventory information was available:
Jan. 1, 2016, beginning inventory 3,000 units at $100= $300,000
March purchases 8,000 units at $120 =960,000
September purchases 5,000 units at $130 =650,000
6, On December 31, 2016, the net realizable value of Priceâsinventory was $750,000. Price records LCNRV write-downs as separatelosses.
On December 31, 2016, Price Company recorded the journal entriesrequired for items
1, On December 31, 2016, Price received $9,000 for an annualinterest payment on Williams Company bonds that mature in 4 years.The 6% bonds have a face value of $150,000 were purchased to yield8%. The current balance in the Discount on bond investment accountis $7,731. Price classified this investment as held-to-maturity andused the effective interest method. The fair value of the bonds atyear-end was $170,000. Note: It is not necessary to computethe price/present value of the bond investment.
2, On December 31, 2016, Price received $47,000from the sale of 100 tablet devices. Each tablet came with6-monthsof tech support and service beginning on January 1, 2017. Thestand-alone selling prices are: tablet, $450 per device; techsupport, $50 per tablet. COGS related to this sale is included initem #5.
3, On December 31, 2016, Price recorded bad debt expense usingthe allowance method. At the beginning of2016, the balances inAccounts Receivable and Allowance for Uncollectible Accounts were$1,000,000 and$50,000 (credit), respectively. In 2016, Pricerecorded net credit sales of $5,000,000 and cash collections of$4,700,000. Actual uncollectible accounts receivable written off in2016 were $100,000. Price estimated uncollectible accounts to be 5%of year-end Accounts Receivable.
4, On December 31, 2016, Price recorded interest on a 3-year,$100,000 noninterest-bearing note using the effective interestmethod. Price received the note from a customer on January 1, 2016.The effective interest rate was 10%.
5. On December 31, 2016, Price the cost of goods sold entry forthe periodic recordkeeping system. Price used the FIFO inventorymethod and had 6,000 units left in ending inventory. The followinginventory information was available:
Jan. 1, 2016, beginning inventory 3,000 units at $100= $300,000
March purchases 8,000 units at $120 =960,000
September purchases 5,000 units at $130 =650,000
6, On December 31, 2016, the net realizable value of Priceâsinventory was $750,000. Price records LCNRV write-downs as separatelosses.
