Accounting Questions
January 31, 2020. Part A: PERCENT OF SALES METHOD Assume that River Corporation uses the percent of sales method to estimate future uncollectible accounts. a. What adjusting entry does River make to record January 2020 Bad Debt Expense? b. What is the "Accounts Receivable, net" on River's January 31, 2020 Balance Sheet? c. What is "Bad Debt Expense" on River's January 2020 Income Statement? Part B: ANALYSIS OF RECEIVABLES METHOD Assume that River Corporation instead uses the analysis of receivables method to estimate future uncollectible accounts. a. What adjusting entry does River make to record January 2020 Bad Debt Expense? b. What is the "Accounts Receivable, net" on River's January 31, 2020 Balance Sheet? c. What is "Bad Debt Expense" on River's January 2020 Income Statement?The Accounts Receivable balance for River Corporation is $330,000 as of January 31, 2020. Before calculating and recording January 2020 Bad Debt Expense, the Allowance for Doubtful Accounts has a credit balance of $6,000. Credit sales for January 2020 are $3,300,000, and over the past several years, 1.5% of credit sales have proven uncollectible. An aging of River Corporation's Accounts Receivable results in a $53,025 estimate for the Allowance for Doubtful Accounts as of January 31, 2020. Part A: PERCENT OF SALES METHOD Assume that River Corporation uses the percent of sales method to estimate future uncollectible accounts. a. What adjusting entry does River make to record January 2020 Bad Debt Expense? [:1 c. What is \"Bad Debt Expense\" on River's January 2020 Income Statement? [:1 Part B: ANALYSIS OF RECEIVABLES METHOD Assume that River Corporation instead uses the analysis of receivables method to estimate future uncollectible accounts. a. What adjusting entry does River make to record January 2020 Bad Debt Expense? _. :l' Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash balance according to the company's records at August 31, $22,700. 2. Cash balance according to the bank statement at August 31, $23,660. 3. Checks outstanding, $4,610. 4. Deposit in transit, not recorded by bank, $3,700. 5. A check for $340 in payment of an account was erroneously recorded in the check register as $430. 5. Bank debit memo for service charges, $40 a. Prepare a bank reconciliation, using the format shown in Exhibit 13. Creative Design Co. Bank Reconciliation August 31, 20Y6 Cash balance according to bank statement Adjusted balance Cash balance according to company's records Adjusted balance6. Bank debit memo for service charges, $40. a. Prepare a bank reconciliation, using the format shown in Exhibit 13. Creative Design Co. Bank Reconciliation August 31, 20Y6 Cash balance according to bank statement Adjusted balance Cash balance according to company's records Adjusted balance b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash? $ c. Must a bank reconciliation always balance (reconcile)
