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есе for Bad Debts ivable able nsurance Fixtures d Depn. - Furniture

есе for Bad Debts ivable able nsurance Fixtures d Depn. - Furniture

FINANCIAL ACCOUNTING
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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91 The following list of accounts and their balances appear on the books of M Thai Spa as of December 31, 2018: Cash Accounts Receivable Allowance for Bad Debts Notes Receivable Unexpired Insurance Furniture & Fixtures Accumulated Depn. - Furniture Equipment Accumulated Depn. - Equipment Accounts Payable Notes Payable Unearned Commissions Jay, Capital Jay, Personal P 58,850 32,400 Membership Fee 2,500 19,000 Advertising Expense 2,575 Taxes and Licenses 238,000 Rent 5,950 Sales Salaries 432,000 Office Salaries 21,600 Store Supplies Expense 15,000 Office Supplies Expense 50,000 600 60,000 3.600 Mel, Capital 40.000 945.900 1,530,500 300,160 108,970 644,000 346.000 150,000 3,400 2,090 310,850 10,610 5,455 15,000 Service Fee Income Pa Utilities Expense Interest Expense Interest Income Loss on Foreign Exchange Partnership agreement calls for the following: Monthly salary allowance of P5,000 for Mel and P7,500 for Jay, 12% interest on capital balances, and residual profit to be shared equally. Additional information were given to adjust the books: a) Provision for bad debts should be 10% of the outstanding accounts receivable. b) Office Furniture and Fixtures were acquired July 1, 2017 and the Delivery Equipment were acquired January 1, 2017. Depreciation rate is the same for both assets. c) One half of the unearned commission is already earned. d) Prepaid insurance on the delivery equipment is payable annually starting May 1. e) P10,000 of the notes receivable is interest bearing at 18% dated December 1, 2018 and due after 60 days. f) The note payable was issued to the bank and discounted at 18% for a year on December 1, 2018. The discount was charged to interest expense. g) Tax rate is 30%. Direction: Prepare a 10-column worksheet with a profit distribution table.
Transcribed Image Text:91 The following list of accounts and their balances appear on the books of M Thai Spa as of December 31, 2018: Cash Accounts Receivable Allowance for Bad Debts Notes Receivable Unexpired Insurance Furniture & Fixtures Accumulated Depn. - Furniture Equipment Accumulated Depn. - Equipment Accounts Payable Notes Payable Unearned Commissions Jay, Capital Jay, Personal P 58,850 32,400 Membership Fee 2,500 19,000 Advertising Expense 2,575 Taxes and Licenses 238,000 Rent 5,950 Sales Salaries 432,000 Office Salaries 21,600 Store Supplies Expense 15,000 Office Supplies Expense 50,000 600 60,000 3.600 Mel, Capital 40.000 945.900 1,530,500 300,160 108,970 644,000 346.000 150,000 3,400 2,090 310,850 10,610 5,455 15,000 Service Fee Income Pa Utilities Expense Interest Expense Interest Income Loss on Foreign Exchange Partnership agreement calls for the following: Monthly salary allowance of P5,000 for Mel and P7,500 for Jay, 12% interest on capital balances, and residual profit to be shared equally. Additional information were given to adjust the books: a) Provision for bad debts should be 10% of the outstanding accounts receivable. b) Office Furniture and Fixtures were acquired July 1, 2017 and the Delivery Equipment were acquired January 1, 2017. Depreciation rate is the same for both assets. c) One half of the unearned commission is already earned. d) Prepaid insurance on the delivery equipment is payable annually starting May 1. e) P10,000 of the notes receivable is interest bearing at 18% dated December 1, 2018 and due after 60 days. f) The note payable was issued to the bank and discounted at 18% for a year on December 1, 2018. The discount was charged to interest expense. g) Tax rate is 30%. Direction: Prepare a 10-column worksheet with a profit distribution table.
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