The following additional information is available at June 30, 2022: (i) (ii) (iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022. (iv) Store Supplies on hand at June 30, 2022 amounted to $55,000. Insurance of $225,000 was paid on April 1, 2022, for 9-months to December 2022 The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $10,000. (v) The motor truck was acquired on February 1, 2022, and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $15,000 (vi) (vii) Salaries earned by employees not yet paid amounted to $101,400 at June 30, 2022. Accrued interest expense as of June 30, 2022, $44,400. (viii) (ix) On June 30, 2022, $309,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the Allowance for Bad Debts should be $100,000. (x) After making all other adjustments, a physical count of inventory was done, which reveals that there was $1,134,900 worth of inventory on hand at June 30,2022 Other data: (xi) The business is expected to make principal payments totalling $275,500 towards the loan during the fiscal year to June 30,2023 Agricultural Farms Products Co. Ltd - Corn Branch Trial Balance as at June 30, 2022 Trial Balance A/C Name DR CR Cash 290,135 Accounts receivable 1,000,000 Allowance for bad debt 45,000 Merchandise Inventory 1,150,000 Store Supplies 62,000 Prepaid Insurance 225,000 Prepaid rent 318,500 Furniture and fixtures 600,000 Accumulated depreciation-Furniture and Fixtures 59,000 Motor Truck 1,200,000 Accumulated depreciation - Motor Truck Accounts payable 82,100 Salary payable Interest payable 35,800 Unearned Sales revenue 359,500 Long-term loan 950,000 Capital 2,900,000 Withdrawals Sales revenue 125,000 3,431,900 Sales discount 100,500 Sales returns and allowances Cost of goods sold Salaries expense 105,500 1,000,000 830,000 Insurance Expense Utilities Expense 225,000 325,665 364,000 Rent Expense Depreciation Expense - Furniture & Fixtures Depreciation Expense - Motor Truck Store Supplies Expense Gain on Disposal of Old Motor Truck Bad-Debt Expense Interest Expense 58,000 7,921,300 7,921,300

The following additional information is available at June 30, 2022: (i) (ii) (iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022. (iv) Store Supplies on hand at June 30, 2022 amounted to $55,000. Insurance of $225,000 was paid on April 1, 2022, for 9-months to December 2022 The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $10,000. (v) The motor truck was acquired on February 1, 2022, and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $15,000 (vi) (vii) Salaries earned by employees not yet paid amounted to $101,400 at June 30, 2022. Accrued interest expense as of June 30, 2022, $44,400. (viii) (ix) On June 30, 2022, $309,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the Allowance for Bad Debts should be $100,000. (x) After making all other adjustments, a physical count of inventory was done, which reveals that there was $1,134,900 worth of inventory on hand at June 30,2022 Other data: (xi) The business is expected to make principal payments totalling $275,500 towards the loan during the fiscal year to June 30,2023 Agricultural Farms Products Co. Ltd - Corn Branch Trial Balance as at June 30, 2022 Trial Balance A/C Name DR CR Cash 290,135 Accounts receivable 1,000,000 Allowance for bad debt 45,000 Merchandise Inventory 1,150,000 Store Supplies 62,000 Prepaid Insurance 225,000 Prepaid rent 318,500 Furniture and fixtures 600,000 Accumulated depreciation-Furniture and Fixtures 59,000 Motor Truck 1,200,000 Accumulated depreciation - Motor Truck Accounts payable 82,100 Salary payable Interest payable 35,800 Unearned Sales revenue 359,500 Long-term loan 950,000 Capital 2,900,000 Withdrawals Sales revenue 125,000 3,431,900 Sales discount 100,500 Sales returns and allowances Cost of goods sold Salaries expense 105,500 1,000,000 830,000 Insurance Expense Utilities Expense 225,000 325,665 364,000 Rent Expense Depreciation Expense - Furniture & Fixtures Depreciation Expense - Motor Truck Store Supplies Expense Gain on Disposal of Old Motor Truck Bad-Debt Expense Interest Expense 58,000 7,921,300 7,921,300

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 7RE: McKinney Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made...

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