Can you help prepare the 2 attached journal entries for this example The management of Banciu Corporation provides you with comparative balance sheets at December 31, 20X1, and December 31, 20X0, appearing below. December 31, 20X1 20X0 Assets Cash $ 174,000 $ 223,200 Accounts receivable 306,000 327,600 Allowance for uncollectible accounts (19,200 ) (20,400 ) Inventories 579,600 645,600 Machinery and equipment 1,112,400 776,400 Accumulated depreciation on machinery and equipment (499,200 ) (446,400 ) Leasehold improvements 104,400 104,400 Accumulated amortization on leasehold improvements (69,600 ) (58,800 ) Securities held for plant expansion 180,000 0 Patents 33,360 36,000 Totals $ 1,901,760 $ 1,587,600 Liabilities and stockholders’ equity Accounts payable $ 279,360 $ 126,000 Dividend payable 48,000 0 Current portion of 6% serial bonds payable 60,000 60,000 6% serial bonds payable—noncurrent portion 300,000 360,000 Preferred stock 108,000 120,000 Common stock 600,000 600,000 Retained earnings 506,400 321,600 Totals $ 1,901,760 $ 1,587,600 Supplemental Information: a. The following table presents a comparative analysis of retained earnings as of December 31, 20X1, and December 31, 20X0. December 31, 20X1 20X0 Beginning balance $ 321,600 $ 157,200 Net income 234,000 206,400 555,600 363,600 Dividends declared (48,000 ) (42,000 ) Premium on repurchased preferred Stock (1,200 ) -0- Ending balance $ 506,400 $ 321,600 b. On December 10, 20X1, the board of directors declared a cash dividend of $0.24 per share, payable to holders of common stock on January 10, 20X2. c Purchased new machinery for $463,000. In addition, Banciu sold certain machinery it was no longer using for $57,600. The machinery cost $127,000 and had accumulated depreciation of $53,800 at the date of the sale. Banciu made no other entries in Machinery and equipment or related accounts other than for depreciation. d. Purchased 120 preferred shares, par value $100, at $110 and subsequently canceled the shares. Banciu debited the premium paid to Retained earnings. e. Paid $2,400 of legal costs in successful defense of a new patent, which it correctly debited to the Patents account. It recorded patent amortization amounting to $5,040 during the year ended December 31, 20X1. f. During 20X1, Banciu wrote off accounts receivable totaling $3,600 as uncollectible. g. During 20X1, Banciu purchased $180,000 of securities that are being held for future plant expansion.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
| December 31, | ||||||
| 20X1 | 20X0 | |||||
| Assets | ||||||
| Cash | $ | 174,000 | $ | 223,200 | ||
| 306,000 | 327,600 | |||||
| Allowance for uncollectible accounts | (19,200 | ) | (20,400 | ) | ||
| Inventories | 579,600 | 645,600 | ||||
| Machinery and equipment | 1,112,400 | 776,400 | ||||
| (499,200 | ) | (446,400 | ) | |||
| Leasehold improvements | 104,400 | 104,400 | ||||
| Accumulated amortization on leasehold improvements | (69,600 | ) | (58,800 | ) | ||
| Securities held for plant expansion | 180,000 | 0 | ||||
| Patents | 33,360 | 36,000 | ||||
| Totals | $ | 1,901,760 | $ | 1,587,600 | ||
| Liabilities and |
||||||
| Accounts payable | $ | 279,360 | $ | 126,000 | ||
| Dividend payable | 48,000 | 0 | ||||
| Current portion of 6% serial bonds payable | 60,000 | 60,000 | ||||
| 6% serial bonds payable—noncurrent portion | 300,000 | 360,000 | ||||
| Preferred stock | 108,000 | 120,000 | ||||
| Common stock | 600,000 | 600,000 | ||||
| 506,400 | 321,600 | |||||
| Totals | $ | 1,901,760 | $ | 1,587,600 | ||
Supplemental Information:
a. The following table presents a comparative analysis of retained earnings as of December 31, 20X1, and December 31, 20X0.
| December 31, | |||||||
| 20X1 | 20X0 | ||||||
| Beginning balance | $ | 321,600 | $ | 157,200 | |||
| Net income | 234,000 | 206,400 | |||||
| 555,600 | 363,600 | ||||||
| Dividends declared | (48,000 | ) | (42,000 | ) | |||
| Premium on repurchased preferred Stock | (1,200 | ) | -0- | ||||
|
Ending balance |
$ | 506,400 | $ | 321,600 | |||
b. On December 10, 20X1, the board of directors declared a cash dividend of $0.24 per share, payable to holders of common stock on January 10, 20X2.
c Purchased new machinery for $463,000. In addition, Banciu sold certain machinery it was no longer using for $57,600. The machinery cost $127,000 and had accumulated depreciation of $53,800 at the date of the sale. Banciu made no other entries in Machinery and equipment or related accounts other than for depreciation.
d. Purchased 120
e. Paid $2,400 of legal costs in successful defense of a new patent, which it correctly debited to the Patents account. It recorded patent amortization amounting to $5,040 during the year ended December 31, 20X1.
f. During 20X1, Banciu wrote off accounts receivable totaling $3,600 as uncollectible.
g. During 20X1, Banciu purchased $180,000 of securities that are being held for future plant expansion.
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