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Frankel Inc. experienced the following transactions for 2014, its first year of operations: 1. Issued common stock for $80,000 cash. 2. Purchased $225,000 of merchandise
| Frankel Inc. experienced the following transactions for 2014, its first year of operations: |
| 1. | Issued common stock for $80,000 cash. |
| 2. | Purchased $225,000 of merchandise on account. |
| 3. | Sold merchandise that cost $150,000 for $298,000 on account. |
| 4. | Collected $246,000 cash from accounts receivable. |
| 5. | Paid $210,000 on accounts payable. |
| 6. | Paid $62,000 of salaries expense for the year. |
| 7. | Paid other operating expenses of $51,000. |
| 8. | Frankel adjusted the accounts using the following information from an accounts receivable aging schedule. |
| Number of Days Past Due | Amount | Percent Likely to Be Uncollectible | Allowance Balance | ||
| Current | $ | 31,200 | .01 | ||
| 030 | 13,000 | .05 | |||
| 3160 | 2,600 | .10 | |||
| 6190 | 2,600 | .20 | |||
| Over 90 days | 2,600 | .50 | |||
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2.
value: 1.50 points
Required information
| Required |
| a. | Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings".) |
| FRANKEL INC. | ||||||||||||||
| Accounting Equation for the Year 2014 | ||||||||||||||
| Event | Assets | = | Liabilities | + | Equity | Accounts Titles for Retained Earnings | ||||||||
| Cash | + | Accounts Receivable | Allowance | + | Merchandise Inventory | = | Accounts Payable | + | Common Stock | = | Retained Earnings | |||
| 1. | + | + | = | + | = | |||||||||
| 2. | + | + | = | + | = | |||||||||
| 3a. | + | + | = | + | = | |||||||||
| 3b. | + | + | = | + | = | |||||||||
| 4. | + | + | = | + | = | |||||||||
| 5. | + | + | = | + | = | |||||||||
| 6. | + | + | = | + | = | |||||||||
| 7. | + | + | = | + | = | |||||||||
| 8. | + | + | = | + | = | |||||||||
| Bal. | + | + | = | + | = |
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