Question
Problems: 1. The Connecting Company uses the percent of sales method of accounting for uncollectible accounts receivable. During the current year, the following transactions occurred:
Problems:
1. The Connecting Company uses the percent of sales method of accounting for uncollectible accounts receivable. During the current year, the following transactions occurred: 1. Prepare the general journal entries to record these transactions.(omit explanations)
Date | Explanation | Post Ref | Debit | Credit |
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2. At December 31 of the current year, a company reported the following: Total sales for the current year: $780,000, includes $160,000 in cash sales. Accounts receivable balance at Dec. 31, current year: $190,000. Balance of allowance for doubtful accounts at 12/31, current year: $1500 credit.
Calculate the dollar amount for the year end adjusting entry under the following 2 options. (show your work)
- Bad debt is estimated to by 1.5% of credit sales
- Bad debt expense is estimated to be 5% of accounts receivable.
3. Crystal Products allows customers to use bank credit cards to charge purchases. The bank used by Crystal Products processes all bank credit cards in exchange for a 3% processing fee. All credit card receipts deposited are credited to the company account on the day of deposit. Assume that on January 18, Crystal Products sold and deposited $19,000 worth of bank credit card receipts. Prepare the general journal entry to record this transaction. (The company uses Credit Card Fees Expense to record all processing fees.)
Date | Explanation | Post Ref | Debit | Credit |
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4. A company has the following unadjusted account balances at December 31, of the current year: Accounts Receivable of $185,700 and Allowance for Doubtful Accounts of $1,600 (credit balance). This company uses the aging of accounts receivable to estimate its bad debts. The following aging schedule reflects its accounts receivable at the current year-end: a. Calculate the amount of the allowance for doubtful accounts that should appear on the December 31 of the current year balance sheet. b. Prepare the adjusting journal entry to record bad debts expense for the current year.
Date | Explanation | Post Ref | Debit | Credit |
12/31 |
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5. On March 31, 2013, Home Decorating Pavilion received a bank statement containing a balance of $9,750. The balance in the firm's checkbook and Cash account on the same date was $10,290. The difference between the two balances is caused by the items listed below. a. A $2,875 deposit made on March 30 does not appear on the bank statement. b. Check 358 for $485 issued on March 29 and Check 359 for $1,650 issued on March 30 have not yet been paid by the bank. c. A credit memorandum shows that the bank has collected a $1,100 note receivable and interest of $110 for the firm. d. A service charge of $25 appears on the bank statement. e. A debit memorandum shows an NSF check for $525. (The check was issued by Dane Smithey, a credit customer.) f. The firm's records indicate that Check 341 of March 1 was issued for $900 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $800. g. The bank made an error by deducting a check for $560 issued by another business from the balance of Home Decorating Pavilion's account. Instructions: 1. Prepare a bank reconciliation statement for the firm as of March 31, 2013. 2. Record entries for any items on the bank reconciliation statement that must be journalized. Date the entries March 31, 2013. Use page 4 of a general journal.
Bank Reconciliation
Balance per Bank | $ | Balance per book | $ |
Add:
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Subtract:
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Adjusted Cash Balance | $ | Adjusted Cash Balance | $ |
Date | Explanation | Post Ref | Debit | Credit |
12/31 |
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