At the end of year there was an imbalance in the trial balance of Messy and Co which meant that asuspense account with a credit balance of €700 had to be created.The following items were discovered after investigation:I.A sales credit note for €750 was correctly recorded on the trade receivables account butinconectly included with purchases returns.A stock of Heating Oil valued at €300 had not been accounted for at all. All costs associatedwith light and heat have been recorded in the appropriate expense account.III.П.An early settlement discount of €100 had been taken even though the early payment period hadexpired, and the supplier statement records the amount as still dueCost of sales included €750 for components for a new non-current asset. These componentswill extend the useful life of the asset and should have been capitalised.Sale of goods for €1,200 on credit had been entered correctly in the trade receivables accountbut omitted in the sales account.IV.V.VI. Trade purchases amounting to €650 had been correctly reflected in the trade payables accountbut entered as €1,650 in the purchases accountBefore the above, Messy and Co had recorded a gross profit of €46,000 and a Net profit of €28,750.Required:1. Prepare the Joumal Entries needed to correct each of the errors. (namatives ot required)2. Prepare the Suspense account to reflect the above transactions3. Calculate the revised Gross and Net prdfit after the adjustments have been made

Suspense Account is the temporary account created to correct errors and omissions.

At the end of year there was an imbalance in suspense account with a credit balance of €7C The following items were discovered after im I. A sales credit note for €750 was corre incomectly included with purchases rE П. II. with light and heat have been recorde Anearly settlement discount of €100 expired, and the supplier statement re IV. A stock of Heating Oil valued at €300 II. Cost of sales included €750 for comp

At the end of year there was an imbalance in suspense account with a credit balance of €7C The following items were discovered after im I. A sales credit note for €750 was corre incomectly included with purchases rE П. II. with light and heat have been recorde Anearly settlement discount of €100 expired, and the supplier statement re IV. A stock of Heating Oil valued at €300 II. Cost of sales included €750 for comp

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume Simple Company had credit sales of $243,000 and cost of goods sold of $143,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $180. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment?
Current Attempt in Progress At the beginning of the current period, Whispering Ltd. had balances in Accounts Receivable of £288,000 and in Allowance for Doubtful Accounts of £9,300 (credit). During the period, it had net credit sales of £860,000 and collections of £817,000. It wrote off as uncollectible accounts receivable of £6,800. However, a £3,600 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total £24,300 at the end of the period. (Omit cost of goods sold entries.) (a) Prepare the entries to record sales and collections during the period.. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period. (d) Prepare the entry to record bad debt expense for the period.
The trial balance before adjustment of Ehrlich Company reports the following balances: Dr. Cr. Accounts receivable $420,000 Allowance for doubtful accounts (debit balance) $ 5,000 Sales (all on credit) 2,000,000 Sales returns and allowances 70,000 Instructions – show all calculations a. Prepare the entry for estimated bad debts assuming that doubtful accounts are estimated to be 5% of gross accounts receivable. b. Prepare the entry for the estimated bad debts assuming that the company estimates bad debts based on the percentage of sales method, using 2% of net sales.
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $992,000 and sales for the year total $11,240,000. a. The allowance account before adjustment has a credit balance of $13,400, Bad debt expense is estimated at 1/4 of 1% of sales. b. The allowance account before adjustment has a credit balance of $13,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $42,900. c. The allowance account before adjustment has a debit balance of $8,300. Bad debt expense is estimated at 1/2 of 1% of sales. d. The allowance account before adjustment has a debit balance of $8,300. An aging of the account in the customer lodger indicates estimated doubtful accounts of $68,900. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. b. S C. d.
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What is the ending balance of the Allowance for doubtful receivables, given the following information: On January 1 2010, the Allowance for Doubtful Accounts of Alpha Inc. has a €10.500 credit balance and Accounts Receivable has a €150.000 debit balance. On December 31, some receivables are written down by €7.500 Answer: X
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Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $777,000 and sales for the year total $8,810,000. a. The allowance account before adjustment has a credit balance of $10,500. Bad debt expense is estimated at 3/4 of 1% of sales. b. The allowance account before adjustment has a credit balance of $10,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $33,600. c. The allowance account before adjustment has a debit balance of $5,700. Bad debt expense is estimated at 1/4 of 1% of sales. d. The allowance account before adjustment has a debit balance of $5,700. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $47,300. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. $ b. $ d. $ %24
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