Liang Company began operations in Year 1. During its first two years, the company completed a number transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 a. Sold $1,353,900 of merchandise on credit (that had cost $978,100), terms n/30. b. Wrote off $20,900 of uncollectible accounts receivable. c. Received $670,600 cash-in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.00% of accounts receivable would be uncollectible. Year 2 e. Sold $1,532,900 of merchandise (that had cost $1,268,900) on credit, terms n/30. f. Wrote off $31,100 of uncollectible accounts receivable. g. Received $1,245,100 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.00% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense (The company uses the perpetual inve system and it applies the allow

Liang Company began operations in Year 1. During its first two years, the company completed a number transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 a. Sold $1,353,900 of merchandise on credit (that had cost $978,100), terms n/30. b. Wrote off $20,900 of uncollectible accounts receivable. c. Received $670,600 cash-in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.00% of accounts receivable would be uncollectible. Year 2 e. Sold $1,532,900 of merchandise (that had cost $1,268,900) on credit, terms n/30. f. Wrote off $31,100 of uncollectible accounts receivable. g. Received $1,245,100 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.00% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense (The company uses the perpetual inve system and it applies the allow

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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At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 320,000 Credit sales $ 800,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 432,000 debit Allowance for doubtful accounts $ 4,300 debit 2. Bad debts are estimated to be 3% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.
The Miller Company recognized $129,000 of service revenue earned on account during Year 2. There was no beginning balance in the accounts receivable and allowance accounts. During Year 2, Miller collected $85,000 of cash from accounts receivable. The company estimates that it will be unable to collect 3% of its sales on account. The net realizable value of Miller's receivables at the end of Year 2 was: Multiple Choice $47,870. $44.000, $40,130. $41,450.
At the beginning of the current period, Waterway Industries had balances in Accounts Receivable of $190,800 and in Allowance for Doubtful Accounts of $9,670 (credit). During the period, it had net credit sales of $730,800 and collections of $749,620. It wrote off as uncollectible accounts receivable of $7,511. However, a $3,339 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $23,000 at the end of the period. (Omit cost of goods sold entries.) (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period. (d) Prepare the entry to record bad debt expense for the period. (Credit account titles are automatically indented when…
The beginning Accounts Receivable and Allowance for Doubtful Accounts balances of Justin Corporation are 500,000 and 50,000. Net credit sales totaled 4,500,000 during the year while collections amounted to 4,400,000. Bad debt expense for the year is 30,000. Included in the collections was a 10,000 account that was written off in the prior year and was recovered during the current year. What is the net realizable value of the Accounts Receivable as of the end of the year?
At the beginning of Year 3 Omega Company had a $75,000 balance in its accounts receivable account and a $10,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Earned $256,000 of revenue on account. (2) Collected $248,000 cash from accounts receivable. (3) Wrote off $8,500 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. The December 31, Year 3 ending balance in the allowance for doubtful accounts account (balance after expense recognition) is: Multiple Choice $2,980. $8,500. $2,660. $3,300.
On January 1, the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $40,000 and $1,500 respectively. During the year, the company reported $80,000 of credit sales. There were $500 of receivables written off as uncollected during the year. Cash collections of receivables amounted to $78,200. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance. The net realizable value of receivables appearing on the balance sheet will amount to
Maple Leafs Construction has the following data for the year ended December 31, Year 1: Accounts receivable (January 1, Year 1) $455,000 Credit sales 900,000 Collections from credit customers 825,000 Customer accounts written off as uncollected 15,000 Allowance for doubtful accounts (after write-off of uncollected accounts) 2,100 Estimated uncollected accounts based on an aging 29,200 analysis (December 31, Year 1) Refer to Maple Leafs Construction. What is the balance of accounts receivable at December 31, Year 1? O $455,000 O $511,900 O $515,000 O $440,000
On December 31, 20X1, the company reported a debit balance of $200,000 in accounts receivable and a credit balance of $5,000 in the allowance for expected credit losses. December 31 is the company’s reporting date. During 20X2, the company had the following transactions: a. The company made a credit sale of $300,000. b. The company collected accounts receivable for 350,000. c. The company wrote off the uncollectible accounts for $12,000. d. The company collected the receivable of $4,000 that had been written off previously. Required Note: Show calculation: (1) Prepare journal entries to record the above four transactions. (2) Assume that 2% of the company’s accounts receivable cannot be collected, prepare the adjusting journal entry at the end of 20X2.
K Blended Corporation uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $1,000. During the year Blended wrote off uncollectible receivables of $2,200. Blended recorded Bad Debts Expense of $3,300. What is Blended's year-end balance in Allowance for Bad Debts? OA. $5,500 OB. $1,100 C. $2,100 OD. $4,300 1
Use the information in each of the following separate cases to calculate the unknown amount. a. Corentine Company had $157,000 of accounts payable on September 30 and $135,000 on October 31. Total purchases on credit during October were $286,000. Determine how much cash was paid on accounts payable during October. b. On September 30, Valerian Company had a $105,000 balance in Accounts Receivable. During October, the company collected $105,390 from its credit customers. The October 31 balance in Accounts Receivable was $94,000. Determine the amount of sales on credit that occurred in October. c. During October, Alameda Company had $107,500 of cash receipts and $108,150 of cash disbursements. The October 31 Cash balance was $21,100. Determine how much cash the company had at the close of business on September 30. Complete this question by entering your answers in the tabs below. Required A Required B Required C On September 30, Valerian Company had a $105,000 balance in Accounts…
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Alpaca Consulting Inc reported net sales of $1,500,000 for the year. Also, at at the end of the year, the company reported balances of $390,000 and $3,800 of accounts receivables and allowance for doubtful accounts, respectively. All amounts and balances have normal balances. REQUIRED: 1. Assume the company estimates its bad debts as 1.20% of net sales. Record the required adjusting entry to record bad debts. The journal must be properly formatted. 2. Assume the company estimates its uncollectible accounts as 5% of accounts receivable. Record the required adjusting entry to record bad debts. The journal must be properly formatted.