ltên-off on furniture shs.500 was not posted to the furnitureaccount.Question twenty one:The bookkeeping system of Turner is not computerised, and at 30 September20X8 the bookkeeper was unable to balance the accounts.The trial balance totals were:Debit shs. 1,796,100Credit shs. 1,852,817Nevertheless, he proceeded to prepare draft financial statements, inserting thedifference as a balancing figure in the balance sheet. The draft profit and lossaccount showed a profit of shs. 141,280 for the year ended 30 September 20X8.He then opened a suspense account for the difference and began to checkthrough the accounting records to find the difference. He found the followingerrors and omissions:1. shs.8,980 - the total of the sales returns book for September 20X8, had beencredited to the purchases returns account.2. shs.49,600 paid for an item of plant purchased on 1 April 20X8 had beendebited to plant repairs account. The company depreciates its plant at 20% perannum on a straight line basis, with proportional depreciation in the year ofpurchase.3. The cash discount totals for the month of September 20X8 had not beenposted to the general ledger accounts. The figures were:Amiri Y Mgogo: Msc Finance and Investment, CPA(T), BAC (0655 170338)Introduction to financial Accounting (ACU 07101 / ACU 07105)Page 15Retuin Cutward8986Return InwardSusponsoLietuin inue. 8980 Discount allowed shs.836Discount received shs.919*. shs. 580 insurance prepaid at 30 September 20X7 had not been broughtdown as an opening balance5. The balance of shs.38,260 on the telephone expense account had beenomitted from the trial balance6. A car held as a non-current asset had been sold during the year forshs.4,800. The proceeds of sale were entered in the cash book but had beencredited to the sales account in the general ledger. The original cost of the carshs. 12,000, and the accumulated depreciation to date shs.8,000, wereincluded in the motor vehicles account and the accumulated depreciationaccount. The company depreciates motor vehicles at 25% per annum on astraight line basis with proportionate depreciation in the year of purchase butnone in the year of sale.Required:a) Open a suspense account for the difference between the trial balance totals.Prepare the journal entries necessary to correct the errors and eliminate thebalance on the suspense account. Narratives are not required.b) Draw up a statement showing the revised profit after correcting the aboveerrors.

Suspense Account: It is a temporary account prepared to record the doubtful entries. This account…

Discount allowed shs.836 Discount received shs.919 4. shs.580 insurance prepaid at 30 September 20X7 had not been brought down as an opening balance 5. The balance of shs.38,260 on the telephone expense account had been omitted from the trial balance 6. A car held as a non-current asset had been sold during the year for shs.4,800. The proceeds of sale were entered in the cash book but had been credited to the sales account in the general ledger. The original cost of the car shs. 12,000, and the accumulated depreciation to date shs.8,000, were included in the motor vehicles account and the accumulated depreciation account. The company depreciates motor vehicles at 25% per annum on a straight line basis with proportionate depreciation in the year of purchase but none in the year of sale. Required: a) Open a suspense account for the difference between the trial balance totals. Prepare the journal entries necessary to correct the errors and eliminate the balance on the suspense account. Narratives are not required. b) Draw up a statement showing the revised profit after correcting the above errors.

Discount allowed shs.836 Discount received shs.919 4. shs.580 insurance prepaid at 30 September 20X7 had not been brought down as an opening balance 5. The balance of shs.38,260 on the telephone expense account had been omitted from the trial balance 6. A car held as a non-current asset had been sold during the year for shs.4,800. The proceeds of sale were entered in the cash book but had been credited to the sales account in the general ledger. The original cost of the car shs. 12,000, and the accumulated depreciation to date shs.8,000, were included in the motor vehicles account and the accumulated depreciation account. The company depreciates motor vehicles at 25% per annum on a straight line basis with proportionate depreciation in the year of purchase but none in the year of sale. Required: a) Open a suspense account for the difference between the trial balance totals. Prepare the journal entries necessary to correct the errors and eliminate the balance on the suspense account. Narratives are not required. b) Draw up a statement showing the revised profit after correcting the above errors.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Required information [The following information applies to the questions displayed below.] On December 31, Jarden Company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Expected Percent Uncollectible 1.25% 2.00 6.50 Accounts Receivable Age of Accounts Receivable $ 830,000 Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due 254,000 86,000 38,000 12,000 Required: 1. Compute the required balance of the Allowance for Doubtful Accounts at December 31 using an aging of accounts receivable. Accounts Receivable Percent Uncollectible (#.##%) Not due: 1 to 30: 31 to 60: 61 to 90: Over 90: Estimated balance of allowance for uncollectibles X = = = |||| 32.75 68.00 Estimated Uncollectible $ 0
Hh
6 Mario Company's Accounts Receivable balance atDecember 31 was $300,000 and there was a credit balance of $1,400 in the Alowance for Doubtful Accounts, The year's sales were $1,800,000. Mario estimates credit losses for the year at 1.5% of sales. After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year- end? A) $300,000 B) $271,600 C) $325,400 D) $277,400
Dengar
Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2: Received $2,060 from Ian Kearns and wrote off the remainder owed of $2,310 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20: Reinstated the account of Ian Kearns and received $2,310 cash in full payment. If an amount box does not require an entry, leave it blank. Dec. 20-Reinstate Dec. 20-Collection
Banning Company uses the alowance method to account for uncolectible receivables. At the beginning of the year. Allowance for Bad Debts had a credit balance of $1,400 During the year Banning wrote off uncollectible recevabies of $2.300. Barning recorded Bad Debts Expense of $2,700 What is Barning's year-end balance in Alowance for Bad Debts? OA $1,800 OB $400 OC $4,100 OD $5,000 Time Remaining: 01:17:13 Next
Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables. Mar. 17: Received $2,570 from Ian Kearns and wrote off the remainder owed of $3,910 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 July 29: Reinstated the account of Ian Kearns and received $3,910 cash in full payment. July 29 18 July 29
! Required information [The following information applies to the questions displayed below.] On December 31, Jarden Company's Allowance for Doubtful Accounts has an unadjusted credit balance of $16,000. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable $ 820,000 Age of Accounts Receivable Not yet due Expected Percent Uncollectible 1.30% 328,000 1 to 30 days past due 2.05 65,600 31 to 60 days past due 6.55 32,800 13,120 61 to 90 days past due Over 90 days past due 33.00 69.00 2. Prepare the adjusting entry to record bad debts expense at December 31. Note: Round percentage answers to nearest whole percent. Do not round intermediate calculations.
Question: A customer who owes Berry Sales Company $2,000 is declared bankrupt by a federal court. What journal entry would be made to write off this account: A. Allowance for Uncollectable Accounts 2,000 Accounts Receivable/Customer Account 2,000 B. Accounts Receivable/Customer Account 2,000 Allowance for Uncollectable Accounts 2,000 C. Accounts Receivable 2,000 Notes Receivable 2,000 D. Cash 2,000 Accounts Receivable 2,000
Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $1,970 from Ian Kearns and wrote off the remainder owed of $1,360 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20. Reinstated the account of Ian Kearns and received $1,360 cash in full payment. Reinstate Collection
9. On December 31, (before adjusting and closing the account), the allowance for doubtful accounts showed a debit balance of $950. An aging of the accounts receivable indicated that the amount expected to be uncollectible was $4,900. The adjusting journal entry to record bad debt expense would include: ABCDE A. B. C. D. E. a credit to Bad Debt Expense for $5,850. a credit to Allowance for Doubtful Accounts for $5,850 a debit to Bad Debt Expense for $4,900 a credit to Accounts Receivable for $3,950 a debit to Bad Debt Expense for $3,950
Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables. Mar. 17: Received $2,590 from Paula Spitler and wrote off the remainder owed of $3,000 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 July 29: Reinstated the account of Paula Spitler and received $3,000 cash in full payment. July 29 3E July 29