sweetgigi5950
15.05.2020 •
Business
Sleepy Recliner Chairs completed the following selected transactions:
Jul. 1 Sold merchandise inventory to Good minus Mart, receiving a $ 40,000, nine-month, 8 % note. Ignore Cost of Goods Sold.
Oct. 31 Recorded cash sales for the period of $ 20 comma 000. Ignore Cost of Goods Sold.
Dec. 31 Made an adjusting entry to accrue interest on the Good minus Mart note.
31 Made an adjusting entry to record bad debt expense based on an aging of accounts receivable. The aging schedule shows that $ 14,300 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $ 11,400. 2019
Apr. 1 Collected the maturity value of the Good minus Mart note.
Jun. 23 Sold merchandise inventory to Ambiance comma Corp., receiving a 60-day, 12 % note for $ 11,000. Ignore Cost of Goods Sold.
Aug. 22 Ambiance comma Corp. dishonored its note at maturity; the business converted the maturity value of the note to an account receivable.
Nov. 16 Loaned $ 20 comma 000 cash to Creed, Inc., receiving a 90-day, 14 % note.
Dec. 5 Collected in full on account from Ambiance comma Corp.
31 Accrued the interest on the Creed, Inc. note.
Requirement
Record the transactions in the journal of Sleepy Recliner Chairs. Explanations are not required. (For notes stated in days, use a 360-day year. Round to the nearest dollar.)
Solved
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Ответ:
Solution :
The carrying value of the asset =
Equipment that is sold for
, therefore, the profit is 
The net income gain on the sale - increase, the company is getting a gain from the sale.
The cash from the investing activities-increased. Thus the proceeds from the sale of the assets are recorded as the cash inflow.
The cash from the operating activities -- no change. While we calculate the operating cashflow, the gain on the sale of the assets added back to the income. So there is no change in the total.
The total assets -- increased. The carrying value will be zero after the sale, however, the cash on the balance sheet is then increased and it also captures gain. Now in order to balance the both sides, the net income increases the retained earnings section.