Prepare Closing Entries
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 14BEA: Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000....
Related questions
Question
On January 1, Year 1, the general ledger of a company includes the following account balances:
Accounts | Debit | Credit |
Cash | 60,500 | |
28,600 | ||
Allowance for Uncollectible Accounts | 4,000 | |
Inventory | 38,100 | |
Notes Receivable (5%, due in 2 years) | 33,600 | |
Land | 173,000 | |
Accounts Payable | 16,600 | |
Common Stock | 238,000 | |
75,200 | ||
Totals | 333,800 | 333,800 |
During January Year 1, the following transactions occur:
January | 1 | Purchase equipment for $21,300. The company estimates a residual value of $3,300 and a six-year service life. | ||
January | 4 | Pay cash on accounts payable, $11,300. | ||
January | 8 | Purchase additional inventory on account, $100,900. | ||
January | 15 | Receive cash on accounts receivable, $23,800. | ||
January | 19 | Pay cash for salaries, $31,600. | ||
January | 28 | Pay cash for January utilities, $18,300. | ||
January | 30 | Sales for January total $238,000. All of these sales are on account. The cost of the units sold is $124,000. |
Information for
Depreciation on the equipment for the month of January is calculated using the straight-line method.- The company estimates future uncollectible accounts. The company determines $4,800 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
- Accrued interest revenue on notes receivable for January.
- Unpaid salaries at the end of January are $34,400.
- Accrued income taxes at the end of January are $10,800
Prepare Closing Entries
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning