Clara's Consulting Has a Perpetual Inventory System and Uses the Allowance

question 46

Essay

Clara's Consulting has a perpetual inventory system and uses the allowance method to account for its receivables. It has completed the following selected transactions:
2018 $\text {Nov. \quad1 Sold\quad \(\$ 8,900\) of inventory to a client for \(\$ 12,400,2 / 10 , \mathrm { n } / 30\).}$
$\text {\quad\quad\quad 7\quad Borrowed \(\$ 300,000\) cash from Independent Bank, receiving a 5 percent 175 day note.}$
$\text\quad\quad\quad {9\quad Received payment from the Nov. 1 sale.}$
$\text {\quad\quad\quad22 \quad Wrote off a client's account, \(\$ 2,700\).}$
$\text {Dec.\quad 5 \quad Recorded VISA credit card sale of \(\$ 30,000\). VISA charges a 4 percent fee. The cost of sales is \(\$ 22,800\).}$
$\text {\quad\quad\quad31 \quad Made an adjusting entry to accrue interest on the Independent Bank note.}$
$\quad\quad\quad\text {31\quad The accounts receivable balance at the end of December is \(\$ 432,000\) and the company estimates that \(1 \%\) will be uncollectible. Prior to this adjustment, the debit balance in Allowance for Doubtful Accounts is \(\$ 1,250\).}$
$\text {2019}$
$\text {May \quad1 \quad Paid the maturity value of the Independent \(B\) ank note.}$
$\quad\quad\quad\text {15 \quad Sold \(\$ 3,000\) of inventory to a customer for \(\$ 5,600\). The customer paid with her debit card. The bank charges \(\$ 1\) per debit card transaction.}$
$\text {Jun. \quad23 \quad Sold inventory to Arnold Company, receiving a 30-day, 6 percent note for \(\$ 18,000\). The cost of the inventory was \(10,700\).}$
$\text {Jul.\quad 23 \quad Arnold Company failed to pay its note at maturity; converted the maturity value of the note to an account receiv able.}$
$\text {Nov. \quad16 \quad Paid salaries of \(\$ 10,800\)}$
$\text {Dec.\quad 5 \quad Collected in full from Arnold Company.}$
$\quad\quad\quad\text {31 \quad Sales recorded in 2017 amounted to \(\$ 459,000\) and the company estimates that \(1 \%\) will be uncollectible.}$ Record the transactions in the general journal. Explanations are not required.

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Definitions:

Racial Policies

Strategies and laws implemented by governments or institutions aiming to manage relations among different racial groups, often influencing socioeconomic status and rights.

Social Integration

The process by which individuals from different backgrounds come to live together harmoniously with shared norms and values.

Economic Integration

The process by which different countries reduce trade barriers and coordinate monetary and fiscal policies to become more economically interdependent.

Two Solitudes

Refers to a situation of cultural separation or lack of communication, originally describing the relationship between English and French-speaking Canadians.