Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following items pertain to the Current Assets section of the balance sheet for Jackson Corp. at the end of its accounting year, December 31,

The following items pertain to the Current Assets section of the balance sheet for Jackson Corp. at the end of its accounting year, December 31, 2016. Each item must be considered and any necessary adjustment recognized. Additionally, the accountant for Jackson wants to develop the Current Assets section of the balance sheet as of the end of 2016.

a. Cash and cash equivalents amount to $19,375.
b. A 9%, 120-day certificate of deposit was purchased on December 1, 2016, for $8,000.
c. Gross accounts receivable at December 31, 2016, amount to $42,000. Before adjustment, the credit balance in Allowance for Doubtful Accounts is $340. Based on past experience, the accountant estimates that 3% of the gross accounts receivable outstanding at December 31, 2016, will prove to be uncollectible.
d. A customers 12%, 90-day promissory note in the amount of $4,000 is held at the end of the year. The note has been held for 45 days during 2016.

Required:

1. Record the adjusting entries required in (b), (c), and (d).
2. Prepare the Current Assets section of Jacksons balance sheet as of December 31, 2016. In addition to the information in the preceding items, the balances in Inventory and Prepaid Insurance on this date are $65,000 and $4,800, respectively.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduces Quantitative Finance

Authors: Paul Wilmott

2nd edition

470319585, 470319581, 978-0470319581

More Books

Students also viewed these Finance questions