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The following data were selected from the records of Larker Company for the year ended December Balances January 1 2010 Accounts receivable

The following data were selected from the records of Larker Company for the year ended December 31, 2010. Balances January 1, 2010 Accounts receivable (various customers) ...... $115,000 Allowance for doubtful accounts .......... 7,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 2/10, n/30 (assume a unit sales price of $500 in all transactions and use the gross method to record sales revenue). Transactions during 2010 a. Sold merchandise for cash, $234,000. b. Sold merchandise to R. Jones; invoice price, $13,000. c. Sold merchandise to K. Black; invoice price, $25,000. d. Two days after purchase date, R. Jones returned one of the units purchased in (b) and received account credit. e. Sold merchandise to B. Sears; invoice price, $24,500. f. R. Jones paid his account in full within the discount period. g. Collected $98,000 cash from customer sales on credit in prior year, all within the discount periods. h. K. Black paid the invoice in (c) within the discount period. i. Sold merchandise to R. Roy; invoice price, $17,500. j. Three days after paying the account in full, K. Black returned seven defective units and received a cash refund. k. After the discount period, collected $6,000 cash on an account receivable on sales in a prior year. l. Wrote off a 2009 account of $3,000 after deciding that the amount would never be collected. m. The estimated bad debt rate used by the company was 1.5

Apr 11 2020 View more View Less

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