Journalize the transactions. The company uses the perpetual and allowance methods. Post to Allowance for Doubtful Accounts, Income Summary, and Bad Debts Expense accounts as needed. (Be sure to record the beginning balance in the Allowance account in the working papers that accompany this text.) Prepare a current assets section of the balance sheet. Ending balances needed are as follows: Cash, $12,000; Accounts Receivable, $175,000; Office Supplies. $2.140: Merchandise Inventory. $103.000: Prepaid Rent.
Journalize the transactions. The company uses the perpetual and allowance methods. Post to Allowance for Doubtful Accounts, Income Summary, and Bad Debts Expense accounts as needed. (Be sure to record the beginning balance in the Allowance account in the working papers that accompany this text.) Prepare a current assets section of the balance sheet. Ending balances needed are as follows: Cash, $12,000; Accounts Receivable, $175,000; Office Supplies. $2.140: Merchandise Inventory. $103.000: Prepaid Rent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:From the preceding as well as the following additional data on January 1, 2018,
complete a-c:
Acct. No.
Balance
Allowance for Doubtful Accounts
114
$4,300
Income Summary
312
Bad Debts Expense
612
a. Journalize the transactions. The company uses the perpetual and allowance
methods.
b. Post to Allowance for Doubtful Accounts, Income Summary, and Bad Debts
Expense accounts as needed. (Be sure to record the beginning balance in
the Allowance account in the working papers that accompany this text.)
c. Prepare a current assets section of the balance sheet. Ending balances
needed are as follows: Cash, $12,000; Accounts Receivable, $175,000;
Office Supplies, $2,140; Merchandise Inventory, $103,000; Prepaid Rent,
$1,050.
Transcribed Image Text:13A-4. Seay Company completed the following transactions:
2018
Sold merchandise on account to Roy's Supply, $1,700. Cost of
merchandise sold, $1,000.
Jan.
9
Jan.
15
Wrote off the account of Pete Ramos as uncollectible because of his
death, $400.
Mar.
17
Received $450 from Rupe Co., whose account had been written off in
2017. The account was reinstated and the collection recorded.
Apr.
Received 14% of the $4,000 owed by Lane Daley. The remainder was
written off as uncollectible.
9
June
The account for Mac's Garage was reinstated for $1,300. The account
was written off 3 years ago and collected in full today.
15
Prepared a compound entry to write the following accounts off as
uncollectible: Jack's Diner, $140; Kail Auto, $440; Red's Hardware,
$750.
Oct.
18
Sold merchandise on account to J. B. Rug, $1,500. Cost of
merchandise sold, $900.
Nov.
12
Dec.
Based on an aging of Accounts Receivable, it was estimated that
$6,600 will be uncollectible out of a total of $175,000 in Accounts
31
Receivable.
Dec.
31
Closed Bad Debts Expense to Income Summary.
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