challenge 7

ACC 211 Challenge #5 ACCOUNTING FOR RECEIVABLES 1. Using the data provided below, prepare the necessary adjusting journal entries Please include appropriate dates and explanations for each entry 2. Using the attached T-accounts for the ledger, and post the adjusting journal entries. 3. Once the ledger account balances are updated, prepare updated financial statements 4 Answer questions a-h A) Compass Corporation uses the percentage of receivables method to estimate uncollectible receivables, using the analysis of receivables method. (the T-account is provided to assist you in your calculations, the official ledger is on the following page.) Compass Corporation Schedule of Accounts Receivable by Age For the Year Ended December 31, 2017 Allowance for Doubttul Accounts 1,200 Unadj Bal Total Amount Percent Uncollectible Uncollectible Dollars A/R Aged Category Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Total 40,000 17,250 10,100 5,000 2,500 2% 4% 10% 35% 50% 74,850 B) Prepare the adjusting journal entry to record the accrual of interest as of 12/31/2017 for Note Receivable #1 based on the following information: Issued date of note =-102/2017 Term of note, in days : 120 Face amount of note Annual interest rate S40 000 6% # days to accrue interest? Accrued interest through 12/31 Total interest on note- 1. PREPARE THE REQUIRED JOURNAL ENTRIES Date Debit Credit Description Adjusting Entries Post Ref