Question
Roth Inc. experienced the following transactions for Year 1, its first year of operations: Issued common stock for $80,000 cash. Purchased $230,000 of merchandise on
Roth Inc. experienced the following transactions for Year 1, its first year of operations: Issued common stock for $80,000 cash. Purchased $230,000 of merchandise on account. Sold merchandise that cost $152,000 for $302,000 on account. Collected $248,000 cash from accounts receivable. Paid $215,000 on accounts payable. Paid $58,000 of salaries expense for the year. Paid other operating expenses of $47,000. Roth 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 $ 32,400 0.01
030 13,500 0.05
3160 2,700 0.10
6190 2,700 0.20
Over 90 days 2,700 0.50
a. Record the above transactions in general journal form and post to T-accounts.
b. Prepare the income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for Roth Inc. for Year 1.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started