QUESTION 2

The balance of accounts receivable is $275,000. The allowance for uncollectible accounts has a credit balance of $2,000. Net credit sales for the year were $751,000 and cash sales were $88,000. Information for estimating uncollectible accounts expense is presented below. For each independent situation, prepare the adjusting entry to record the estimate and determine the resultant balance in the allowance for uncollectible accounts.

1. The company uses the aging-of-accounts-receivable method. A partial aging of accounts receivable balance is presented below:

Percentage

Days Outstanding Amount Uncollectible

Not yet due $160,000 1%

31-60 days past due 50,000 5%

61-90 days past due 30,000 10%

91-120 days past due 25,000 25%

Over 120 days past due 10,000 50%

Date Accounts Debit Credit

Balance in the allowance for uncollectible accounts is $_______________________

1. The company uses the percent-of-sales method. Historical data indicates that approximately 3% of net credit sales are uncollectible.

Date Accounts Debit Credit

Balance in the allowance for uncollectible accounts is $_______________________

QUESTION #3

Knight Company purchased a tract of land and contracted with a builder to build an office building, a parking lot, and landscaping. The following transactions resulted from the contractor's activities. Determine the total costs allocated to the land, building, and land improvements accounts.

Purchased land for $135,000.

Paid a demolition company $35,000 to remove an old structure on the property.

Paid $15,000 in delinquent taxes on the property.

Paid the contractor $300,000 to design and build the office building.

Paid $25,000 for fencing.

Paid $40,000 for paving.

Paid an electrical contractor $10,000 for outdoor lighting.

a. Cost of land $_______________

b. Cost of building $_______________

c. Cost of land improvements $_______________

QUESTION #4

Danny Dimes Construction Company acquired the following plant assets on January 1, 2021. The delivery truck was driven for 12,000 miles in 2021 and 20,000 miles in 2022; of its useful estimated life of 100,000 miles. Compute depreciation for each of the assets for 2021 and 2022 only.

Residual

Assets Cost Value Useful Life Depreciation Method

Office Equipment $150,000 $ 5,000 5 years Straight-line

Building $280,000 $30,000 20 years Double-declining balance

Delivery truck $125,000 $25,000 10 years Units-of-production

** Show your math**

2021 2022

a. Office equipment ___________________ ___________________

b. Building ___________________ ___________________

c. Delivery equipment ___________________ ___________________

QUESTION #5

Devil Manufacturing held three interest-bearing notes during 2021 and 2022. For each note, determine the following items:

a. The notes maturity date

b. The notes maturity value (total amount due)

c. Interest revenue to be recorded on the note in 2021

Note 1 issued September 25, 2021, $15,000, 10%, 60 days

Note 2 issued November 20, 2021, $25,000, 12%. 90 days

Note 3 issued December 1, 2021, 14,000, 9%, 75 days

Answer:

Note 1 Note 2 Note 3

a. Maturity date

b. Maturity value

c. Interest revenue for 2021 only

(hint: may not be the entire notes interest)

QUESTION EXTRA CREDIT

What is the definition of a Contra-account?

Can you give an example of a Contra-Asset accountread one current article in accounting publications pertaining to any topics of the terms work. A short summary of each article is to be handed in to the instructor no later than the day of the final exam. If you need assistance choosing an article, please see me.

OUTLINE FOR THE TERM PROJECT: Author, Title, Name of the Publication and Date of Article, description of the authors solutions or recommendations and conclusions. Please reference the sources of your article in APA format. LENGTH: One doubled-spaced 8 X 11 typed page per article. PERIODICALS: The Journal of Accountancy, CPA Journal, Accounting Horizons, Management Accounting Adequate preparation for each class is required for success. If the personal situation will not allow you to devote the necessary time during each week to prepare for this course, we suggest you consult with your professor or counselor