Question
The following information is given at the beginning of December. Debit Credit Cash $67,500 Accounts receivables $21,000 Allowance for uncollectible accounts $7,000 Inventory (1,100 units
The following information is given at the beginning of December.
Debit Credit
Cash $67,500
Accounts receivables $21,000
Allowance for uncollectible accounts $7,000
Inventory (1,100 units at $7) $7,700
Accounts payable $25,400
Common stock $43,000
Retained earnings $20,800
Total $96,200 $96,200
Record the following four transactions as adjusting and prepare the t-account
Dec 31 The company estimates 20% of the ending balance of accounts receivables is not going to be collected. (Hint: Remember to consider the balance in the allowance for uncollectibe account, if any.)
Dec 31 Record December's adjustment to accrue interest for the notes receivables.
Dec 31 The company uses the lower of cost or net realizable value method for inventory valuation. The net realizable value of the inventory is $8 per unit. Make the adjusting entry if necessary.
Dec 31 Calculate depreciation using Straight line method. The equipment purchased has a useful life of 72 months and no residual value. Record the depreciation for the month of December.
Prepare the Multi-step Income Statement, Statement of Stockholders Equity, and Classified Balance Sheet under the Financial Statements tab for the month ended December 31, 20XX
Check point: Total assets $117,500
| Date | Description | Debit | Credit |
|
|
|
| |
| 1-Dec | Equipment | $ 21,600 |
|
| Cash |
| $ 21,600 | |
| 1-Dec | Note Receivable | $ 14,000 |
|
|
| Cash |
| $ 14,000 |
| 6-Dec | Inventory | $ 38,000 |
|
| Accounts Payable |
| $ 38,000 | |
| 12-Dec | Accounts Receivable | $ 64,000 |
|
| Sales revenue |
| $ 64,000 | |
| 12-Dec | Cost of Good Sold | $ 28,700 |
|
| Inventory |
| $ 28,700 | |
| 20-Dec | Account Payable | $ 28,000 |
|
| Cash |
| $ 28,000 | |
| 23-Dec | Cash | $ 16,000 |
|
| Account Receivable |
| $ 16,000 | |
| 28-Dec | Allowance for uncollectable account | $ 2,800 |
|
| Account Receivable |
| $ 2,800 | |
| 30-Dec | Income tax expense | $ 4,400 |
|
|
| Cash |
| $ 4,400 |
| 31-Dec | Bad debit expeses | $ 9,040 |
|
| Allowance for doubtful accounts |
| $ 9,040 | |
| 31-Dec | Interest revenue | $ 140 |
|
| Interest receivable |
| $ 140 | |
| 31-Dec | Loss from write down of inventory | $ 3,400 |
|
| inventory |
| $ 3,400 | |
| 31-Dec | Depreciation expense | $ 300 |
|
| Accumulated depreciation |
| $ 300 | |
|
|
|
|
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Financial Accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
IFRS 3rd edition
1118978080, 978-1119153726, 1119153727, 978-1119153702, 978-1118978085
