Task 1:

a) Avett Furniture Store has credit sales of $400,000 in 2014 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2014, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7.000 will prove to be uncollectible. On March 4, 2015, the credit manager authorizes a write-off of the $1.200 balance owed by B. Fernitti.

Instructions:

1) Prepare the adjusting entry to record the estimated uncollectible accounts expense in

2014.

2) Show the balance sheet presentation of accounts receivable on December 31, 2014.

3) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make the appropriate entry to record the write-off of the Ferntti account. Also show the balance sheet presentation of accounts receivable before and after the write-off.

b) What are the differences between direct write off method and allowance method of recording

bad debt expense? Which method is more suitable with matching principle? Why? Give a suitable example with necessary journal entries under both methods?

Task 2:

(a) On January 1, 2006, a company purchased a machinery at an acquisition cost of Tk. 84,000 The machinery has been depreciated by the straight line method using a 4 year service life and a Tk. 12,000 salvage value. The company's fiscal year ends on December 31.

Requirements:

Prepare the journal entries to record the disposal of the machinery that it was:

(i) Retired and scrapped with no salvage value on January 1, 2010.

(ii) Sold for Tk. 15,000 on July 1, 2009.

(b) A plant asset acquired at the beginning of the fiscal year at a cost of Tk. 28,20,000 has an estimated trade-in valuel salvage value of Tk. 3,00.000 and an estimated useful life of 8 years. Determine the following:

(i) The amount of annual depreciation by the straight-line method.

(ii) The amount of depreciation for the second year computed by the double declining balance method.

c) What do you mean by plant asset? How do you record the acquisition of plant asset

deprecation the plant asset and disposal of plant asset?

d) Suppose the management's performance is aligned with the company's performance. As a

manager of the company, you wish to have a short-term profit planning for the company, which depreciation method can you target for the initial years to achieve your goal? Why? Illustrate with examples.

e) What is your overall learning from this course? What is your understanding of accounting

before and after the semester? What do you think about the career of accounting? Will you choose accounting as a career? Why or why not?