Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC Limited was formed a few years ago. ABC used the allowance method to measure its bad debts. Selected accounts and their balances at 30

image text in transcribed
image text in transcribed
ABC Limited was formed a few years ago. ABC used the allowance method to measure its bad debts. Selected accounts and their balances at 30 June 2018 were as follows: Accounts receivable $70 000 Less: Allowance for doubtful debts 130 $ 200 000 Building Less: Accumulated Depreciation_building 45 000 Goodwill $ 120 000 Share Capital: 2 000 000 ordinary shares, fully paid $21 000 000 Retained earnings (accumulated losses) 60 000 From 1 July 2018 to 30 June 2019 the company completed the following selected transactions. ABC Limited accounting year ends on 30 June 2018 July 1 Sold goods to Kmart, receiving a $40 000, 9-month, 9% bill. The cost of sales was $20 000 July 28 Sales on account were $80 000; 3% of sales were estimated to be uncollectable, and estimated warranty expense was 4% of sales (For simplicity, Ignore the cost of sales for this transaction). 2019 March 28 Write-offs of accounts receivable totaled $2700. April 1 Kmart dishonoured its bill May 08 Issued 1,000 ordinary shares to acquire land with a cost of $8000, the shares were traded at $12 per share on that date. June 30 Aging of receivables indicates that $2200 of the total receivables was bad. June 30 The value of the goodwill was determined to be $150 000 June 30 The Building had a recoverable amount of $120 000. The building was depreciated on a straight-line basic with 40-year expected life and no residual value. Required: Calculate the following for ABC Limited: 1. The balance of accounts receivable on June 30, 2019: 2. The total bad debts expenses incurred during this accounting year: 3. The balance of ordinary shares on June 30, 2019: 4. The balance of retained earnings on June 30, 2019: 5. The total depreciation expense incurred during this accounting year: 6. The total sales revenue earned during this accounting year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing Audit Of A Private Health Care Facility Case Of The Bondeko Clinic

Authors: Tyty ELOOT ONDAIN

1st Edition

6204271237, 978-6204271231

More Books

Students also viewed these Accounting questions

Question

How do parallel groups differ from self-managing groups?

Answered: 1 week ago

Question

Analyze the impact of labor unions on health care.

Answered: 1 week ago

Question

Assess three motivational theories as they apply to health care.

Answered: 1 week ago

Question

Discuss the history of U.S. labor unions.

Answered: 1 week ago