From the adjusted trial balance below, prepare a classified balance sheet in report format as at June 30, 2020. Adjusted trail balance Accounts unadjusted Adjustments Adjusted DR CR DR CR DR CR cash 127000 127000 Account receivable 151000 151000 Allowance for bad debts 12500 7000 19500 Merchandise inventory 187500 1500 186000 Store supplies 58000 33000 25000 Prepaid insurance 72000 24000 48000 Prepaid rent 56000 42000 14000 furniture 800000 800000 Accumulated depreciation on furniture 256000 64000 320000 computer equipment 450000 450000 Accumulated depreciation on computer 45000 45000 Accounts payable 133500 133500 salaries payable 14000 14000 Interest payable 27000 9000 36000 unearned sales revenue 82000 48000 34000 Long term loan 360000 360000 Eva ready capital 898500 898500 Eva ready withdrawl 104000 104000 sales revenue 1043000 48000 1091000 sales discount 7000 7000 sales return & allowance 5500 5500 Cost of good sold 403000 1500 404500 salaries expense 165000 14000 179000 insurance expense 24000 24000 utilities expense 87500 87500 rent expense 126000 42000 168000 Depreciation on furniture 64000 64000 Depreciation on computer 45000 45000 store supply expense 33000 33000 Gain on disposal of old computer 14000 14000 bad debt expense 7000 7000 interest expense 27000 9000 36000 Total 2826500 2826500 287500 287500 2965500 2965500
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.
From the adjusted
Adjusted trail balance
Accounts | unadjusted | Adjustments | Adjusted | ||||||
|
|
|
|||||||
cash | 127000 | 127000 | |||||||
151000 | 151000 | ||||||||
Allowance for |
12500 | 7000 | 19500 | ||||||
Merchandise inventory | 187500 | 1500 | 186000 | ||||||
Store supplies | 58000 | 33000 | 25000 | ||||||
Prepaid insurance | 72000 | 24000 | 48000 | ||||||
Prepaid rent | 56000 | 42000 | 14000 | ||||||
furniture | 800000 | 800000 | |||||||
256000 | 64000 | 320000 | |||||||
computer equipment | 450000 | 450000 | |||||||
Accumulated depreciation on computer | 45000 | 45000 | |||||||
Accounts payable | 133500 | 133500 | |||||||
salaries payable | 14000 | 14000 | |||||||
Interest payable | 27000 | 9000 | 36000 | ||||||
unearned sales revenue | 82000 | 48000 | 34000 | ||||||
Long term loan | 360000 | 360000 | |||||||
Eva ready capital | 898500 | 898500 | |||||||
Eva ready withdrawl | 104000 | 104000 | |||||||
sales revenue | 1043000 | 48000 | 1091000 | ||||||
sales discount | 7000 | 7000 | |||||||
sales return & allowance | 5500 | 5500 | |||||||
Cost of good sold | 403000 | 1500 | 404500 | ||||||
salaries expense | 165000 | 14000 | 179000 | ||||||
insurance expense | 24000 | 24000 | |||||||
utilities expense | 87500 | 87500 | |||||||
rent expense | 126000 | 42000 | 168000 | ||||||
Depreciation on furniture | 64000 | 64000 | |||||||
Depreciation on computer | 45000 | 45000 | |||||||
store supply expense | 33000 | 33000 | |||||||
Gain on disposal of old computer | 14000 | 14000 | |||||||
bad debt expense | 7000 | 7000 | |||||||
interest expense | 27000 | 9000 | 36000 | ||||||
Total | 2826500 2826500 | 287500 287500 | 2965500 2965500 |
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