Accounting Questions (2-4)

Question 2: Refer to Accounting Question 2.png

List of Accounts

• Accounts Payable
• Accounts Receivable
• Accrued Liabilities
• Accumulated Depreciation - Equipment
• Advances to Employees
• Advertising Expense
• Allowance for Doubtful Accounts
• Allowance for Sales Returns and Allowances
• Bad Debt Expense
• Bank Charges Expense
• Cash
• Cash Over and Short
• Due from Factor
• Entertainment Expense
• Equipment
• Finance Expense
• Finance Revenue
• Freight in
• Freight out
• Gain on Disposal of Equipment
• Gain on Disposal of Land
• Interest Expense
• Interest Income
• Interest Receivable
• Inventory
• Land
• Loss on Disposal of Equipment
• Loss on Disposal of Land
• Loss on Disposal of Receivables
• Loss on Impairment
• Miscellaneous Expense
• No Entry
• Notes Payable
• Notes Receivable
• Office Expense
• Petty Cash
• Postage Expense
• Prepaid Expenses
• Purchase Discounts
• Recourse Liability
• Refund Liability
• Rent Expense
• Sales Discounts
• Sales Discounts Forfeited
• Sales Returns and Allowances
• Sales Revenue
• Servicing Liability
• Service Revenue
• Supplies
• Supplies Expense
• Unearned Revenue

To promote the sale of some specialty goods, Shamrock Ltd. began a generous return policy to its customers. Customers can return merchandise for up to three months following the date of the invoice, no questions asked. For the current period, sales of these specialty goods totalled $40,000. Shamrock chooses to estimate any expected sales returns at the end of each reporting period, rather than recording the Refund Liability at the point of sale. At the end of the reporting period, Shamrock estimates that outstanding returns will be $3,350. Assuming Shamrock follows IFRS, prepare the required adjusting journal entry at the end of the reporting period. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Account Titles and Explanation Debit CreditBridgeport Corp. had net sales in 2020 of $2.2 million. At December 31, 2020, before adjusting entries, the balances in selected accounts were as follows: Accounts Receivable $231,300 debit; Allowance for Doubtful Accounts $3,000 debit. Assume Bridgeport has examined the aging of the accounts receivable and has determined the Allowance for Doubtful Accounts should have a balance of $25,900, prepare the December 31, 2020 journal entry to record the adjustment to Allowance for Doubtful Accounts. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit CreditOn January 1. Blue Spruce Corp. lent $53,000 to Larkspur, Inc., accepting Larkspur's $70.543, three-year, zero-interest-bearing note. The implied interest is 10% (a) Prepare Blue's journal entries for the initial transaction, recognition of interest each year assuming use of the effective interest method, and the collection of $70.543 at maturity. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To record initial transaction) (To record interest income in the first year) (To record interest income in the second year) (To record interest income in the third year) (To record collection at maturity)