Bourret Inc. experienced the following events for the first two years of its operations. 2009: 1. Provided
Question:
Bourret Inc. experienced the following events for the first two years of its operations.
2009:
1. Provided \($60,000\) of services on account.
2. Provided \($25,000\) of services and received cash.
3. Collected \($35,000\) cash from accounts receivable.
4. Paid \($12,000\) of salaries expense for the year.
5. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Bourret estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
2010:
1. Wrote off an uncollectible account of \($650\) .
2. Provided \($80,000\) of services on account.
3. Provided \($15,000\) of services and collected cash.
4. Collected \($62,000\) cash from accounts receivable.
5. Paid \($20,000\) of salaries expense for the year.
6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Bourret estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
Required:
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2009.
c. What is the net realizable value of the accounts receivable at December 31, 2009?
d. Repeat Requirements a, b, and c for 2010.
Step by Step Answer:
Survey Of Accounting
ISBN: 9780077503956
1st Edition
Authors: Thomas Edmonds, Philip Olds, Frances McNair, Bor-Yi Tsay