| Jan. 29 | Received 45% of the $18,700 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Apr. 18 | Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,270 cash in full payment of Clark’s account. |
| Aug. 9 | Wrote off the $6,360 balance owed by Iron Horse Co., which has no assets. |
| Nov. 7 | Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,975 cash in full payment of the account. |
| Dec. 31 | Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,265; DeVine Co., $5,595; Moser Distributors, $9,305; Oceanic Optics, $1,150. |
| Dec. 31 | Based on an analysis of the $1,759,500 of accounts receivable, it was estimated that $35,190 will be uncollectible. Journalized the adjusting entry. |
| Required: | |||||||
| 1. | Record the January 1 credit balance of $25,685 in a T account for Allowance for Doubtful Accounts. | ||||||
| 2. |
|
||||||
| 3. | Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). | ||||||
| 4. | Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the sales of $17,710,000 for the year, determine the following:
|
Entries Related to Uncollectible Accounts
The following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31:
| Jan. 19. | Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1,630 cash in full payment of Arlene’s account. |
| Apr. 3. | Wrote off the $9,340 balance owed by Premier GS Co., which is bankrupt. |
| July 16. | Received 25% of the $16,800 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Nov. 23. | Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $2,655 cash in full payment. |
| Dec. 31. | Wrote off the following accounts as uncollectible (one entry): Cavey Co.,$7,025; Fogle Co., $2,085; Lake Furniture, $5,365; Melinda Shryer, $1,515. |
| Dec. 31. | Based on an analysis of the $825,700 of accounts receivable, it was estimated that $35,900 will be uncollectible. Journalized the adjusting entry. |
Required:
1. Record the January 1 credit balance of $34,200 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.
2. a. Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $825,700 balance in accounts receivable reflects the adjustments made during the year.
2. b. Post each entry that affects the following T accounts and determine the new balances:
3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
$fill in the blank 7fc457f5af81fa5_1
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ½ of 1% of the sales of $5,100,000 for the year, determine the following:
a. Bad debt expense for the year.
b. Balance in the allowance account after the adjustment of December 31.
c. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
| Jan. 29 | Received 30% of the $18,900 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Apr. 18 | Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,265 cash in full payment of Clark’s account. |
| Aug. 9 | Wrote off the $6,410 balance owed by Iron Horse Co., which has no assets. |
| Nov. 7 | Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,980 cash in full payment of the account. |
| Dec. 31 | Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,090; DeVine Co., $5,485; Moser Distributors, $9,415; Oceanic Optics, $1,190. |
| Dec. 31 | Based on an analysis of the $1,774,000 of accounts receivable, it was estimated that $35,480 will be uncollectible. Journalized the adjusting entry. |
| Required: | |||||||
| 1. | Record the January 1 credit balance of $25,795 in a T account for Allowance for Doubtful Accounts. | ||||||
| 2. |
|
||||||
| 3. | Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). | ||||||
| 4. | Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the sales of $18,660,000 for the year, determine the following:
|
| Year 1 | ||
| July | 1 | Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. |
| Oct. | 1 | Borrowed $200,000 by issuing a six-year, 6% installment note to Nicks Bank. The note requires annual payments of $40,673, with the first payment occurring on September 30, Year 2. |
| Dec. | 31 | Accrued $3,000 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. | |
| Year 2 | ||
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. |
| Sept. | 30 | Paid the annual payment on the note, which consisted of interest of $12,000 and principal of $28,673. |
| Dec. | 31 | Accrued $2,570 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. | |
| Year 3 | ||
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. | 30 | Paid the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393. |
| 1. | Journalize the entries to record the foregoing transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. |
| 2. | Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. |
| 3. | Determine the carrying amount of the bonds as of December 31, Year 2. |
| Year 1 | ||
| July | 1 | Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. |
| Dec. | 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. |
| 31 | Closed the interest expense account. |
| Year 2 | ||
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. |
| Dec. | 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. |
| 31 | Closed the interest expense account. | |
| Year 3 | ||
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) |
| 1. | Journalize the entries to record the transactions. Round all amounts to the nearest dollar. Be sure to include the year in the date for the entries. Refer to the Chart of Accounts for exact wording of account titles. |
| 2. | Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. |
| 3. | Determine the carrying amount of the bonds as of December 31, Year 2. |
The following transactions were completed by Montague Inc., whose fiscal year is the calendar year:
| 20Y1 | |
| July 1. | Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 20Y1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. |
| 20Y2 | |
| June 30. | Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. |
| 20Y3 | |
| June 30. | Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. (Record the redemption only.) |
2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2.
| a. 20Y1 | $fill in the blank 1dff3ffa7f83007_1 |
| b. 20Y2 | $fill in the blank 1dff3ffa7f83007_2 |
3. Determine the carrying amount of the bonds as of December 31, 20Y2.
$fill in the blank 1dff3ffa7f83007_3
The following transactions were completed by Montague Inc., whose fiscal year is the calendar year:
| 20Y1 | |
| July 1. | Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 20Y1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. |
| 20Y2 | |
| June 30. | Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $390,852 is combined with the semiannual interest payment. |
| 20Y3 | |
| June 30. | Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment of interest and amortization of premium have been recorded. (Record the redemption only.) |
The following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year.
Requirements: Record the proper journal entry for each transaction.
By the end of January, was manufacturing overhead overallocated or underallocated? By how much?
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
| Year 1 | |
| July 1. | Issued $3,660,000 of five-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 10%, receiving cash of $3,377,386. Interest is payable semiannually on December 31 and June 30. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $28,262 is combined with the semiannual interest payment. |
| Dec. 31. | Closed the interest expense account. |
| Year 2 | |
| June 30. | Paid the semiannual interest on the bonds. The bond discount amortization of $28,262 is combined with the semiannual interest payment. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $28,262 is combined with the semiannual interest payment. |
| Dec. 31. | Closed the interest expense account. |
| Year 3 | |
| June 30. | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $169,568 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) |
Required:
1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank or enter “0”. When required, round your answers to the nearest dollar.
2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2.
3. Determine the carrying amount of the bonds as of December 31, Year 2.
The following transactions were completed by Winklevoss Inc. whose fiscal year is the calendar year.
Year 1.
| July | 1 | Issued $71,100,000 of 20-year, 12% callable bonds dated July 1, Year 1, at a market (effective) rate of 14%, receiving cash of $61,621,133. Interest is payable semiannually on December 31 and June 30. |
| Oct. | 1 | Borrowed $250,000 by issuing a six-year, 5% installment note to Nicks Bank. The note requires annual payments of $49,254, with the first payment occurring on September 30, Year 2. |
| Dec. | 31 | Accrued $3,125 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. |
Year 2.
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. |
| Sept. | 30 | Paid the annual payment on the note, which consisted of interest of $12,500 and principal of $36,754. |
| Dec. | 31 | Accrued $2,666 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. |
Year 3
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $8,530,979 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. | 30 | Paid the second annual payment on the note, which consisted of interest of $10,662 and principal of $38,592. |
| Year 1 | ||
| July | 1 | Issued $71,100,000 of 20-year, 12% callable bonds dated July 1, Year 1, at a market (effective) rate of 14%, receiving cash of $61,621,133. Interest is payable semiannually on December 31 and June 30. |
| Oct. | 1 | Borrowed $250,000 by issuing a six-year, 5% installment note to Nicks Bank. The note requires annual payments of $49,254, with the first payment occurring on September 30, Year 2. |
| Dec. | 31 | Accrued $3,125 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. | |
| Year 2 | ||
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. |
| Sept. | 30 | Paid the annual payment on the note, which consisted of interest of $12,500 and principal of $36,754. |
| Dec. | 31 | Accrued $2,666 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $236,972 is combined with the semiannual interest payment. | |
| Year 3 | ||
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $8,530,979 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. | 30 | Paid the second annual payment on the note, which consisted of interest of $10,662 and principal of $38,592. |
| 1. | Journalize the entries to record the foregoing transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. |
| 2. | Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. |
| 3. | Determine the carrying amount of the bonds as of December 31, Year 2. |
Indicate the amount of the Interest Expense in (a) Year 1 and (b) Year 2
Determine the Carrying amount of the bonds as of December 31, year 2.
| Year 1 | ||
| July | 1 | Issued $76,600,000 of 20-year, 8% callable bonds dated July 1, Year 1, at a market (effective) rate of 9%, receiving cash of $69,552,279. Interest is payable semiannually on December 31 and June 30. |
| Oct. | 1 | Borrowed $220,000 by issuing a six-year, 7% installment note to Nicks Bank. The note requires annual payments of $46,155, with the first payment occurring on September 30, Year 2. |
| Dec. | 31 | Accrued $3,850 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $176,193 is combined with the semiannual interest payment. | |
| Year 2 | ||
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $176,193 is combined with the semiannual interest payment. |
| Sept. | 30 | Paid the annual payment on the note, which consisted of interest of $15,400 and principal of $30,755. |
| Dec. | 31 | Accrued $3,312 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $176,193 is combined with the semiannual interest payment. | |
| Year 3 | ||
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $6,342,949 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. | 30 | Paid the second annual payment on the note, which consisted of interest of $13,247 and principal of $32,908. |
| 1. | Journalize the entries to record the foregoing transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. |
| 2. | Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. |
| 3. | Determine the carrying amount of the bonds as of December 31, Year 2. |
This question is not incomplete.
Entries Related to Uncollectible Accounts
The following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31:
| Jan. | 19 | Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,120 cash in full payment of Arlene’s account. |
| Apr. | 3 | Wrote off the $12,150 balance owed by Premier GS Co., which is bankrupt. |
| July | 16 | Received 25% of the $21,800 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Nov. | 23 | Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $3,455 cash in full payment. |
| Dec. | 31 | Wrote off the following accounts as uncollectible (one entry): Cavey Co., $9,135; Fogle Co., $2,715; Lake Furniture, $6,975; Melinda Shryer, $1,970. |
| 31 | Based on an analysis of the $1,074,100 of accounts receivable, it was estimated that $46,700 will be uncollectible. Journalized the adjusting entry. |
Required:
1. Record the January 1 credit balance of $44,500 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.
2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $1,074,100 balance in accounts receivable reflects the adjustments made during the year.
| Jan. 19-reinstate | fill in the blank 72197600c017fc8_2 | fill in the blank 72197600c017fc8_3 | |
| fill in the blank 72197600c017fc8_5 | fill in the blank 72197600c017fc8_6 | ||
| Jan. 19-collection | fill in the blank 72197600c017fc8_8 | fill in the blank 72197600c017fc8_9 | |
| fill in the blank 72197600c017fc8_11 | fill in the blank 72197600c017fc8_12 | ||
| Apr. 3 | fill in the blank 72197600c017fc8_14 | fill in the blank 72197600c017fc8_15 | |
| fill in the blank 72197600c017fc8_17 | fill in the blank 72197600c017fc8_18 | ||
| July 16 | fill in the blank 72197600c017fc8_20 | fill in the blank 72197600c017fc8_21 | |
| fill in the blank 72197600c017fc8_23 | fill in the blank 72197600c017fc8_24 | ||
| fill in the blank 72197600c017fc8_26 | fill in the blank 72197600c017fc8_27 | ||
| Nov. 23-reinstate | fill in the blank 72197600c017fc8_29 | fill in the blank 72197600c017fc8_30 | |
| fill in the blank 72197600c017fc8_32 | fill in the blank 72197600c017fc8_33 | ||
| Nov. 23-collection | fill in the blank 72197600c017fc8_35 | fill in the blank 72197600c017fc8_36 | |
| fill in the blank 72197600c017fc8_38 | fill in the blank 72197600c017fc8_39 | ||
| Dec. 31-write-off | fill in the blank 72197600c017fc8_41 | fill in the blank 72197600c017fc8_42 | |
| fill in the blank 72197600c017fc8_44 | fill in the blank 72197600c017fc8_45 | ||
| fill in the blank 72197600c017fc8_47 | fill in the blank 72197600c017fc8_48 | ||
| fill in the blank 72197600c017fc8_50 | fill in the blank 72197600c017fc8_51 | ||
| fill in the blank 72197600c017fc8_53 | fill in the blank 72197600c017fc8_54 | ||
| Dec. 31-adjusting | fill in the blank 72197600c017fc8_56 | fill in the blank 72197600c017fc8_57 | |
| fill in the blank 72197600c017fc8_59 | fill in the blank 72197600c017fc8_60 |
2. b. Post each entry that affects the following T accounts and determine the new balances:
| Allowance for Doubtful Accounts | |||
|---|---|---|---|
| fill in the blank 2b1b79009fb7fd2_2 | Jan. 1 Balance | fill in the blank 2b1b79009fb7fd2_3 | |
| fill in the blank 2b1b79009fb7fd2_5 | fill in the blank 2b1b79009fb7fd2_7 | ||
| fill in the blank 2b1b79009fb7fd2_9 | fill in the blank 2b1b79009fb7fd2_11 | ||
| fill in the blank 2b1b79009fb7fd2_13 | |||
| fill in the blank 2b1b79009fb7fd2_15 | |||
| Dec. 31 Adjusted Balance | fill in the blank 2b1b79009fb7fd2_16 |
| Bad Debt Expense | |||
|---|---|---|---|
| fill in the blank 2b1b79009fb7fd2_18 |
3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
$fill in the blank 4e0baff48037fa8_1
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ½ of 1% of the sales of $6,630,000 for the year, determine the following:
a. Bad debt expense for the year.
$fill in the blank 4e0baff48037fa8_2
b. Balance in the allowance account after the adjustment of December 31.
$fill in the blank 4e0baff48037fa8_3
c. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
$fill in the blank 4e0baff48037fa8_4
The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31:
| Jan. 19. | Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalize the receipt of $2,585 cash in full payment of Arlene’s account. | |||||||||||||||||||||||||||||
| Apr. 3. | Wrote off the $14,810 balance owed by Premier GS Co., which is bankrupt. | |||||||||||||||||||||||||||||
| July 16. | Received 40% of the $26,600 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. | |||||||||||||||||||||||||||||
| Nov. 23. | Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,215 cash in full payment. | |||||||||||||||||||||||||||||
| Dec. 31. | Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $11,140 ; Fogle Co., $3,310 ; Lake Furniture, $ 8,505 ; Melinda Shryer, $2,405. | |||||||||||||||||||||||||||||
| Dec. 31. |
Based on an analysis of the $1,311,000 of accounts receivable, it was estimated that $57,000 will be uncollectible. Journalize the adjusting entry. 2. b. Post each entry that affects the following T accounts and determine the new balances:
|
The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31:
| Jan. 19. | Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalize the receipt of $2,585 cash in full payment of Arlene’s account. |
| Apr. 3. | Wrote off the $14,810 balance owed by Premier GS Co., which is bankrupt. |
| July 16. | Received 40% of the $26,600 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Nov. 23. | Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,215 cash in full payment. |
| Dec. 31. | Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $11,140 ; Fogle Co., $3,310 ; Lake Furniture, $ 8,505 ; Melinda Shryer, $2,405. |
| Dec. 31. | Based on an analysis of the $1,311,000 of accounts receivable, it was estimated that $57,000 will be uncollectible. Journalize the adjusting entry. |
Required:
1. Record the January 1 credit balance of $54,300 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.
2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $1,311,000 balance in accounts receivable reflects the adjustments made during the year.
| Feb. 8 | Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| May 27 | Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,350 cash in full payment of Seth’s account. |
| Aug. 13 | Wrote off the $6,400 balance owed by Kat Tracks Co., which has no assets. |
| Oct. 31 | Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,880 cash in full payment of the account. |
| Dec. 31 | Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,190; Bonneville Co., $5,500; Crow Distributors, $9,400; Fiber Optics, $1,110. |
| Dec. 31 | Based on an analysis of the $1,785,000 of accounts receivable, it was estimated that $35,700 will be uncollectible. Journalized the adjusting entry. |
| 1. | Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts. | ||||||
| 2. |
|
||||||
| 3. | Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). | ||||||
| 4. | Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the net sales of $18,200,000 for the year, determine the following:
|
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
| Year 1 | |
| July 1. | Issued $8,630,000 of five-year, 10% callable bonds dated July 1, Year 1, at a market (effective) rate of 11%, receiving cash of $8,304,751. Interest is payable semiannually on December 31 and June 30. |
| Oct. 1. | Borrowed $310,000 by issuing a 10-year, 7% installment note to Nicks Bank. The note requires annual payments of $44,137, with the first payment occurring on September 30, Year 2. |
| Dec. 31. | Accrued $5,425 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $32,525 is combined with the semiannual interest payment. |
| Year 2 | |
| June 30. | Paid the semiannual interest on the bonds. The bond discount amortization of $32,525 is combined with the semiannual interest payment. |
| Sept. 30. | Paid the annual payment on the note, which consisted of interest of $21,700 and principal of $22,437. |
| Dec. 31. | Accrued $5,032 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $32,525 is combined with the semiannual interest payment. |
| Year 3 | |
| June 30. | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $195,149 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. 30. | Paid the second annual payment on the note, which consisted of interest of $20,129 and principal of $24,008. |
Required:
Round all amounts to the nearest dollar.
1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank.
| Year 1 | ||
| July | 1 | Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30. |
| Oct. | 1 | Borrowed $200,000 by issuing a six-year, 6% installment note to Nicks Bank. The note requires annual payments of $40,673, with the first payment occurring on September 30, Year 2. |
| Dec. | 31 | Accrued $3,000 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. | |
| Year 2 | ||
| June | 30 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. |
| Sept. | 30 | Paid the annual payment on the note, which consisted of interest of $12,000 and principal of $28,673. |
| Dec. | 31 | Accrued $2,570 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31 | Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. | |
| Year 3 | ||
| June | 30 | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. | 30 | Paid the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393. |
| 1. | Journalize the entries to record the foregoing transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. |
| 2. | Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2. |
| 3. | Determine the carrying amount of the bonds as of December 31, Year 2. |
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Winklevoss Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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6
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| Jan. 29 | Received 40% of the $18,200 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Apr. 18 | Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,400 cash in full payment of Clark’s account. |
| Aug. 9 | Wrote off the $6,465 balance owed by Iron Horse Co., which has no assets. |
| Nov. 7 | Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,830 cash in full payment of the account. |
| Dec. 31 | Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,190; DeVine Co., $5,510; Moser Distributors, $9,410; Oceanic Optics, $1,205. |
| Dec. 31 | Based on an analysis of the $1,820,500 of accounts receivable, it was estimated that $36,410 will be uncollectible. Journalized the adjusting entry. |
| Required: | |||||||
| 1. | Record the January 1 credit balance of $25,415 in a T account for Allowance for Doubtful Accounts. | ||||||
| 2. |
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| 3. | Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). | ||||||
| 4. | Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the sales of $18,350,000 for the year, determine the following:
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The following transactions were carried out during the month of May by M. Palmer and Company,
a firm of design architects. For each of the five transactions, you are to state whether the transac-
tion represented revenue to the firm during the month of May. Give reasons for your decision in
each case.
a. M. Palmer and Company received $25,000 cash by issuing additional shares of capital stock.
b. Collected cash of $2,400 from an account receivable. The receivable originated in April from
services rendered to a client.
c. Borrowed $12,800 from Century Bank to be repaid in three months.
d. Earned $83 interest on a company bank account during the month of May. No withdrawals
were made from this account in May.
e. Completed plans for guesthouse, pool, and spa for a client. The $5,700 fee for this project was
billed to the client in May, but will not be collected until June 25.
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
| Year 1 | |
| July 1. | Issued $8,630,000 of five-year, 10% callable bonds dated July 1, Year 1, at a market (effective) rate of 11%, receiving cash of $8,304,751. Interest is payable semiannually on December 31 and June 30. |
| Oct. 1. | Borrowed $310,000 by issuing a 10-year, 7% installment note to Nicks Bank. The note requires annual payments of $44,137, with the first payment occurring on September 30, Year 2. |
| Dec. 31. | Accrued $5,425 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $32,525 is combined with the semiannual interest payment. |
| Year 2 | |
| June 30. | Paid the semiannual interest on the bonds. The bond discount amortization of $32,525 is combined with the semiannual interest payment. |
| Sept. 30. | Paid the annual payment on the note, which consisted of interest of $21,700 and principal of $22,437. |
| Dec. 31. | Accrued $5,032 of interest on the installment note. The interest is payable on the date of the next installment note payment. |
| 31. | Paid the semiannual interest on the bonds. The bond discount amortization of $32,525 is combined with the semiannual interest payment. |
| Year 3 | |
| June 30. | Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $195,149 after payment of interest and amortization of discount have been recorded. Record the redemption only. |
| Sept. 30. | Paid the second annual payment on the note, which consisted of interest of $20,129 and principal of $24,008. |
Required:
Round all amounts to the nearest dollar.
1. Journalize the entries to record the foregoing transactions. If an amount box does not require an entry, leave it blank.
2. Indicate the amount of the interest expense in (a) Year 1 and (b) Year 2.
a. Year 1 $fill in the blank 91
b. Year 2 $fill in the blank 92
3. Determine the carrying amount of the bonds as of December 31, Year 2.
The following transactions were selected from among those completed by Hailey Retailers in the current year:
Nov. 20 Sold two items of merchandise to Customer B, who charged the $600 (total) sales price on her Visa credit card. Visa charges Hailey a 2 percent credit card fee.
25 Sold 14 items of merchandise to Customer C at an invoice price of $3,600 (total); terms 2/10, n/30.
28 Sold 12 identical items of merchandise to Customer D at an invoice price of $7,800 (total); terms 2/10, n/30.
30 Customer D returned one of the items purchased on the 28th; the item was defective and credit was given to the customer.
Dec. 06 Customer D paid the account balance in full.
30 Customer C paid in full for the invoice of November 25.
Required:
1. Prepare the appropriate journal entry for each of these transactions. Do not record cost of goods sold.
2. Compute Net Sales.
I just need help with the journal entry on Dec. 06 and also computing the net sales.
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