E7-9 (Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Reba McIntyre Inc. shows the following balances.
Accounts Rec. $90,000 (DR.)
Allowance for Doubtful Accounts 1,750 (DR.)
Sales (all on credit) $680,000 (CR.)
Instructions: Given the entry for estimated bad debts assuming that the allowances is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 1% of net sales.
Click here for the solution: The trial balance before adjustment of Reba McIntyre Inc. shows the following balances
Showing posts with label Adjustment. Show all posts
Showing posts with label Adjustment. Show all posts
Monday, March 21, 2016
Wednesday, October 14, 2015
The trial balances before and after adjustment for Garcia Company at the end of its fiscal year is presented below
E3-13 The trial balances before and after adjustment for Garcia Company at the end of its fiscal year is presented below.
GARCIA COMPANY
Trial Balance
August 31, 2008
Before Adjustment After Adjustment
Dr. Cr. Dr. Cr.
Cash $10,400 $10,400
Accounts Receivable 8,800 9,800
Office Supplies 2,300 700
Prepaid Insurance 4,000 2,500
Office Equipment 14,000 14,000
Accumulated Depreciation–Office Equipment $3,600 $4,500
Accounts Payable 5,800 5,800
Salaries Payable -0- 1,100
Unearned Rent 1,500 600
Common Stock 10,000 10,000
Retained Earnings 5,600 5,600
Service Revenue 34,000 35,000
Rent Revenue 11,000 11,900
Salaries Expense 17,000 18,100
Office Supplies Expense -0- 1,600
Rent Expense 15,000 15,000
Insurance Expense -0- 1,500
Depreciation Expense -0- 900
$71,500 $71,500 $74,500 $74,500
Instructions
Prepare the adjusting entries that were made.
Click here for the solution: The trial balances before and after adjustment for Garcia Company at the end of its fiscal year is presented below
GARCIA COMPANY
Trial Balance
August 31, 2008
Before Adjustment After Adjustment
Dr. Cr. Dr. Cr.
Cash $10,400 $10,400
Accounts Receivable 8,800 9,800
Office Supplies 2,300 700
Prepaid Insurance 4,000 2,500
Office Equipment 14,000 14,000
Accumulated Depreciation–Office Equipment $3,600 $4,500
Accounts Payable 5,800 5,800
Salaries Payable -0- 1,100
Unearned Rent 1,500 600
Common Stock 10,000 10,000
Retained Earnings 5,600 5,600
Service Revenue 34,000 35,000
Rent Revenue 11,000 11,900
Salaries Expense 17,000 18,100
Office Supplies Expense -0- 1,600
Rent Expense 15,000 15,000
Insurance Expense -0- 1,500
Depreciation Expense -0- 900
$71,500 $71,500 $74,500 $74,500
Instructions
Prepare the adjusting entries that were made.
Click here for the solution: The trial balances before and after adjustment for Garcia Company at the end of its fiscal year is presented below
Thursday, August 13, 2015
At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment
P9-5A At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment.
Debits Credits
Accounts Receivable $385,000
Allowance for Doubtful Accounts $ 2,000
Sales 950,000
Instructions
(a) Based on the information given, which method of accounting for bad debts is Worcester Company using—the direct write-off method or the allowance method? How can you tell?
(b) Prepare the adjusting entry at December 31, 2008, for bad debts expense under each of the following independent assumptions.
(1) An aging schedule indicates that $11,750 of accounts receivable will be uncollectible.
(2) The company estimates that 1% of sales will be uncollectible.
(c) Repeat part (b) assuming that instead of a credit balance there is an $2,000 debit balance in Allowance for Doubtful Accounts.
(d) During the next month, January 2009, a $3,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.
(e) Repeat part (d) assuming that Worcester uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.
(f) What type of account is Allowance for Doubtful Accounts? How does it affect how accounts receivable is reported on the balance sheet at the end of the accounting period?
Click here for the solution: At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment
Debits Credits
Accounts Receivable $385,000
Allowance for Doubtful Accounts $ 2,000
Sales 950,000
Instructions
(a) Based on the information given, which method of accounting for bad debts is Worcester Company using—the direct write-off method or the allowance method? How can you tell?
(b) Prepare the adjusting entry at December 31, 2008, for bad debts expense under each of the following independent assumptions.
(1) An aging schedule indicates that $11,750 of accounts receivable will be uncollectible.
(2) The company estimates that 1% of sales will be uncollectible.
(c) Repeat part (b) assuming that instead of a credit balance there is an $2,000 debit balance in Allowance for Doubtful Accounts.
(d) During the next month, January 2009, a $3,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.
(e) Repeat part (d) assuming that Worcester uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.
(f) What type of account is Allowance for Doubtful Accounts? How does it affect how accounts receivable is reported on the balance sheet at the end of the accounting period?
Click here for the solution: At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment
Saturday, June 20, 2015
(Balance Sheet Adjustment and Preparation) The adjusted trial balance of Side Kicks Company and other related information for the year 2007 are presented on the next page
Problem 5-3 (P5-3) (Balance Sheet Adjustment and Preparation) The
adjusted trial balance of Side Kicks Company and other related
information for the year 2007 are presented on the next page.
AND SO ON
Additional information:
1. The LIFO method of inventory value is used.
2. The cost and fair value of the long-term investments that consist of stocks and bonds is the same.
3. The amount of the Construction Work in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $85,000, as shown in the trial balance.
4. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight-line basis.
5. Of the unamortized discount on bonds payable, $2,000 will be amortized in 2008.
6. The notes payable represent bank loans that are secured by long-term investments carried at $120,000. These bank loans are due in 2008.
7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2018.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding. Instructions
Prepare a balance sheet as of December 31, 2007, so that all important information is fully disclosed.
Click here for the solution: (Balance Sheet Adjustment and Preparation) The adjusted trial balance of Side Kicks Company and other related information for the year 2007 are presented on the next page
AND SO ON
Additional information:
1. The LIFO method of inventory value is used.
2. The cost and fair value of the long-term investments that consist of stocks and bonds is the same.
3. The amount of the Construction Work in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $85,000, as shown in the trial balance.
4. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight-line basis.
5. Of the unamortized discount on bonds payable, $2,000 will be amortized in 2008.
6. The notes payable represent bank loans that are secured by long-term investments carried at $120,000. These bank loans are due in 2008.
7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2018.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding. Instructions
Prepare a balance sheet as of December 31, 2007, so that all important information is fully disclosed.
Click here for the solution: (Balance Sheet Adjustment and Preparation) The adjusted trial balance of Side Kicks Company and other related information for the year 2007 are presented on the next page
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