Allowance method entries The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31: Jan. 19. Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,250 cash in full payment of Arlene’s account. Apr. 3. Wrote off the $12,890 balance owed by Premier GS Co., which is bankrupt. July 16. Received 30% of the $23,100 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. Nov. 23. Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $3,665 cash in full payment. Dec. 31. Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $9,700 ; Fogle Co., $2,880 ; Lake Furniture, $ 7,405 ; Melinda Shryer, $2,095. Dec. 31. Based on an analysis of the $1,143,100 of accounts receivable, it was estimated that $49,700 will be uncollectible. Journalized the adjusting entry. Required: 1. Record the January 1 credit balance of $47,300 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts. 2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $1,143,100 balance in accounts receivable reflects the adjustments made during the year.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Allowance method entries
The following transactions were completed by Wild Trout Gallery during the current fiscal year ended December 31:
| Jan. 19. | Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,250 cash in full payment of Arlene’s account. |
| Apr. 3. | Wrote off the $12,890 balance owed by Premier GS Co., which is bankrupt. |
| July 16. | Received 30% of the $23,100 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. |
| Nov. 23. | Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $3,665 cash in full payment. |
| Dec. 31. | Wrote off the following accounts as uncollectible (compound entry): Cavey Co., $9,700 ; Fogle Co., $2,880 ; Lake Furniture, $ 7,405 ; Melinda Shryer, $2,095. |
| Dec. 31. | Based on an analysis of the $1,143,100 of |
Required:
1. Record the January 1 credit balance of $47,300 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.
2. a. Journalize the transactions. If an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $1,143,100 balance in accounts receivable reflects the adjustments made during the year.
| Jan. 19 | fill in the blank 3df21405f016ff9_2 | fill in the blank 3df21405f016ff9_3 | |
| fill in the blank 3df21405f016ff9_5 | fill in the blank 3df21405f016ff9_6 | ||
| Jan. 19 | fill in the blank 3df21405f016ff9_8 | fill in the blank 3df21405f016ff9_9 | |
| fill in the blank 3df21405f016ff9_11 | fill in the blank 3df21405f016ff9_12 | ||
| Apr. 3 | fill in the blank 3df21405f016ff9_14 | fill in the blank 3df21405f016ff9_15 | |
| fill in the blank 3df21405f016ff9_17 | fill in the blank 3df21405f016ff9_18 | ||
| July 16 | fill in the blank 3df21405f016ff9_20 | fill in the blank 3df21405f016ff9_21 | |
| fill in the blank 3df21405f016ff9_23 | fill in the blank 3df21405f016ff9_24 | ||
| fill in the blank 3df21405f016ff9_26 | fill in the blank 3df21405f016ff9_27 | ||
| Nov. 23 | fill in the blank 3df21405f016ff9_29 | fill in the blank 3df21405f016ff9_30 | |
| fill in the blank 3df21405f016ff9_32 | fill in the blank 3df21405f016ff9_33 | ||
| Nov. 23 | fill in the blank 3df21405f016ff9_35 | fill in the blank 3df21405f016ff9_36 | |
| fill in the blank 3df21405f016ff9_38 | fill in the blank 3df21405f016ff9_39 | ||
| Dec. 31 | fill in the blank 3df21405f016ff9_41 | fill in the blank 3df21405f016ff9_42 | |
| fill in the blank 3df21405f016ff9_44 | fill in the blank 3df21405f016ff9_45 | ||
| fill in the blank 3df21405f016ff9_47 | fill in the blank 3df21405f016ff9_48 | ||
| fill in the blank 3df21405f016ff9_50 | fill in the blank 3df21405f016ff9_51 | ||
| fill in the blank 3df21405f016ff9_53 | fill in the blank 3df21405f016ff9_54 | ||
| Dec. 31 | fill in the blank 3df21405f016ff9_56 | fill in the blank 3df21405f016ff9_57 | |
| fill in the blank 3df21405f016ff9_59 | fill in the blank 3df21405f016ff9_60 |
2. b.
| Allowance for Doubtful Accounts | |||
|---|---|---|---|
| fill in the blank 899a0ffb9012f82_2 | Jan. 1 Balance | fill in the blank 899a0ffb9012f82_3 | |
| fill in the blank 899a0ffb9012f82_5 | fill in the blank 899a0ffb9012f82_7 | ||
| fill in the blank 899a0ffb9012f82_9 | fill in the blank 899a0ffb9012f82_11 | ||
| fill in the blank 899a0ffb9012f82_13 | |||
| fill in the blank 899a0ffb9012f82_15 | |||
| Dec. 31 Adjusted Balance | fill in the blank 899a0ffb9012f82_16 |
| fill in the blank 899a0ffb9012f82_18 |
3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
$fill in the blank 9b25fefbc037fc0_1
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ½ of 1% of the sales of $7,060,000 for the year, determine the following:
a. Bad debt expense for the year.
$fill in the blank 9b25fefbc037fc0_2
b. Balance in the allowance account after the adjustment of December 31.
$fill in the blank 9b25fefbc037fc0_3
c. Expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
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