intermediate accounting

Assignment 1 - AIS, Cash, Accounts Receivable

BUSI 2001 - Intermediate Accounting 1 - Fall 2017 Assignment 1 - AIS, Cash, Accounts Receivable Your assignment submission must be typed up in either Word or Excel and uploaded (one file only) to the assignment dropbox before midnight September 24, 2017. Problem 1 The balance in the prepaid insurance account at December 31, 20x4 of $166,000 consists of three insurance policies: Policy A B C Effective Date Jan 1, 20x4 March 31, 20x4 August 31, 20x4 Expiry Date June 30, 20x5 March 31, 20x5 August 31, 20x6 Amount $114,000 72,000 132,000 During the current year, 20x5, the following new policies were purchased. Policy A (renewal) B (renewal) D Effective Date June 30, 20x5 March 31, 20x5 May 31, 20x5 Expiry Date December 31, 20x6 March 31, 20x6 December 31, 20x6 Amount $124,200 74,400 79,800 Required - Write one adjusting journal entry to adjust the prepaid insurance/insurance expense accounts at December 31, 20x5. 2 Problem 2 A company's cash account was last reconciled on November 30, 20x5. The unadjusted cash balance at December 31, 20x5 was $215,322. A comparison of the bank statement to the cash account revealed the following (note that none of the items below have been recorded on the books): Interest on the bank loan of $4,600 was charged on the bank statement. Bank service charges for the month were $670 Outstanding cheques at December 31, 20x5 were $46,520 The December 30, 20x5 and December 31, 20x5 deposits of $45,990 and $32,405 were recorded by the bank on January 2, 20x6 One of the cheques that cleared was recorded for $7,430. The cheque was recorded on the bank statement at $7,043 which was the correct amount. The cheque was for selling expenses. The bank statement balance at December 31, 20x5 was $178,564. Required - Prepare the adjusting journal entries and a bank reconciliation as at December 31, 20x5. Problem 3 The unadjusted trial balance as at December 31, 20x5 shows a credit balance in the doubtful accounts of $35,500. This balance is the December 31, 20x4 balance. During 20x5, several accounts were written off to bad debt expense. A review of the accounts receivable at year-end revealed that an additional $45,000 of accounts should be written off - these accounts are all in the 90 days and over category. The following is an aged listing of accounts at year-end: Age 0-30 31-60 61-90 90+ Balance $370,000 225,000 150,000 135,000 % uncollectible 2% 5% 10% 100% on $45,000 of the accounts and 40% on the balance $880,000 Required - Prepare the adjusting journal entries to adjust the doubtful accounts balance at December 31, 20x5