1-29-2019 ()-Protected View-Saved to this PC Review View Help Tell me what you want to do edt, it's safer to stay n Protected View, LEnable Edeng - 1/30/2019 NAME TYPED AND STAPLED DUE FEBRUARY 5 FINANCIAL ACCOUNTING II-TAKE HOME QUIZ-TO BE 1. (20 POINTS) THE BROWNE COMPANY GATHERED THE FOLLOWING INFORMATION P YEAR ENDED DECEMBER 31, 2004 PRIOR TO ANY ADJUSTMENTS ERTA nolG Toms SALES SALES DISCOUNT SALES RETURNS AND ALLOWANCES ACCOUNTS RECEIVABLE, 1231 ALLOWANCE ACCOUNT, 1231 $ 1,500,000 11,500 3,500 540,000 8,300 Dr. AGING OF ACCOUNTS RECEIVABLE AT 12/31/02 130DAYS 1 60 DAYS 61 90DAYS OVER 90 DAYS S 160,000 105,000 100,000 175,000 TOTAL $540,000 PART I REFER TO THE DATA SHOWN ABOVE ASSUME BROWNE COMPANY USES THE PERCENTAGE OF SALES METHOD ESTIMATES TAT BAD DEBT WILL BE 2 8% OF NET SALES REQUIRED BROWNE A. PREPARE THE ADJUSTING ENTRY TO RECORD BAD DEBT EXPENSE FOR THE YEAR B. WHAT IS THE BALANCE IN THE ALLOWANCE ACCOUNT AT 12/31, AS WELL AS INDICATE WHETHER IT IS DEBIT OR CREDIT? PART I1- REFER TO THE DATA SHOWN ABOVE ASSUME BROWNE COMPANY USES THE AGING OF ACCOUNTS RECEIVABLE METHOD FOR ESTIMATING BAD DEBTS. BROWNE ESTIMATES THAT BAD DEBTS WILL BE AGED AS FOLLOWS 2% FOR (1-30 DAYS), 5% FOR (31-60 DAYS), l0% FOR (61-90 DAYS), AND 15% FOR (OVER 90 DAYS) REQUIRED: A PREPARE THE ADJUSTING ENTRY TO RECORD BAD DEBT-EXPENSE FOR THE YEAR B. WHAT IS THE BALANCE D TIE ALLOWANCE ACCOUNT AT 1231, As wELL AS INDICATE WHETHER IT IS DEBIT OR CREDIT QUESTION 2 CONTINUES ON THE NEXT PAGE ip REDESIGNED. RELIABLE READY FOR YOU 2. (9 POINTS) ON DECEMBER 13, CARELLI COMPANY RECEIVED A 145-DAY, 9 S%, NOTE FOR $225,000 FROM A CUSTOMER FOR A SALE OF MERCHANDISE REQUIRED A. PREPARE THE JOURNAL ENTRY ON DECEMBER 13 B. PREPARE THE ADJUSTING ENTRY ON DECEMBER 31, THE END OF THE YEAR C CALCULATE THE MATURITY VALUE OF THE NOTE D. CALCULATE THE DATE WHEN THE NOTE IS DUE E. PREPARE THE JOURNAL ENTRY THAT WILL BE MADE ON THEI TE THE NOTE IS DUE 3.(4 POINTS) PREPARE THE JOURNAL ENTRIES TO RECORD THE FOLLOWING TRANSAC IONS: 7/12 WROTE OFF AS UNCOLLECTIBLE, $7,000 OF THE TARA MILLER ACCOUNT 9/1 UNEXPECTEDLY RECEIVED A CHECK FOR $7,000 FROM TARA MILLER 4. (2 POINTS) FERRIS COMPANY HAS CASH OF $70,000, SHORT TERM INVESTMENTS OF 60,000, NET ACCOUNTS RECEIVABLE OF $86,000, INVENTORY OF $96,000, PREPAID EXPENSES OF $60,000, ACCOUNTS PAYABLE OF $50,000, UNEARNED REVENUE OF $20,000, NOTES PAYABLE OF 10,000, SALARY PAYABLE OF $6,000, MORTGAGE PAYABLE OF S100,000, BONDS PAYABLE OF $75,000,INCOME TAXES PAYABLE OF $4000. GROSS SALES OF $520,000, SALES RETURNS OF $8.000 AND SALES DISCOUNTS OF $7.000 LAST YEAR'S NET ACCOUNTS RECEIVABLE WERE $114,000. COMPUTE THE FOLLOWING RATIOS QUICK RATIO AVERAGE DAYS' SALES UNCOLLECTED B. 5. (15 POINTS) PREPARE THE JOURNAL ENTRIES TO RECORD THE FOLLOWING TRANSACTIONS APRIL 1 HUERTA COMPANY RECEIVED A 90-DAY, 9 h% NOTE FOR $24,000 FROM ALEXANDRA JEAN IN SETTLEMENT OF AN ACCOUNTS RECEIVABLE JULY1 WHEN ASKED FOR PAYMENT, ALEXANDRA JEAN DISHONORED HER NOTE JULY 13 RECEIVED PAYMENT IN FULL FROM ALEXANDRA EAN. INCLUDING 2 PERCENT INTEREST FOR THE 12 DAYS SINCE THE NOTE WAS DISHONORED HP All-in-One REDESIGNED. REL READY FOR YOU
