Question 2 At December 31, 2023, Credit Ltd. had a credit balance of $15,000 in Allowance for Doubtful Accounts. During 2024, Credit wrote off accounts totaling $14,100. One of those accounts ($1,800) was later collected. At December 31, 2024, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $17,800. Instructions Prepare journal entries to record the 2024 transactions and the adjusting entry for bad debt on 31 December 2024. Question 3 The equity accounts of Medium Ltd. on January 1, 2023, were as follows. Share Capital Preference (9%, $50 par, cumulative, 10,000 shares authorized, 8,000 shares issued) $400,000 Share Capital Ordinary ($1 par value, 2,000,000 shares authorized, 1,000,000 shares issued) 1,000,000 Share Premium-Preference Share Premium-Ordinary 100,000 1,450,000 1,816,000 50,000 Retained Earnings Treasury Shares-Ordinary (20,000 shares) During 2023, the corporation had the following transactions and events pertaining to its equity. Feb. 1 Issued 37,000 ordinary shares for $152,000. Apr. 14 Sold 9,000 treasury shares-ordinary for $42,000. Nov. 10 Dec. 31 Dec. 31 Purchased 1,200 ordinary shares for the treasury at a cost of $8,000. Determined that net income for the year was $452,000. Close the income summary account. Declared a dividend of $0.5 per ordinary share, to be payable in April 2024. There is no dividend in arrear for the preference shares. Instructions (a.) Journalize the transactions and the closing entry for net income and dividend. (b.) Prepare the equity section of the statement of financial position at December 31, 2023.
Question 2 At December 31, 2023, Credit Ltd. had a credit balance of $15,000 in Allowance for Doubtful Accounts. During 2024, Credit wrote off accounts totaling $14,100. One of those accounts ($1,800) was later collected. At December 31, 2024, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $17,800. Instructions Prepare journal entries to record the 2024 transactions and the adjusting entry for bad debt on 31 December 2024. Question 3 The equity accounts of Medium Ltd. on January 1, 2023, were as follows. Share Capital Preference (9%, $50 par, cumulative, 10,000 shares authorized, 8,000 shares issued) $400,000 Share Capital Ordinary ($1 par value, 2,000,000 shares authorized, 1,000,000 shares issued) 1,000,000 Share Premium-Preference Share Premium-Ordinary 100,000 1,450,000 1,816,000 50,000 Retained Earnings Treasury Shares-Ordinary (20,000 shares) During 2023, the corporation had the following transactions and events pertaining to its equity. Feb. 1 Issued 37,000 ordinary shares for $152,000. Apr. 14 Sold 9,000 treasury shares-ordinary for $42,000. Nov. 10 Dec. 31 Dec. 31 Purchased 1,200 ordinary shares for the treasury at a cost of $8,000. Determined that net income for the year was $452,000. Close the income summary account. Declared a dividend of $0.5 per ordinary share, to be payable in April 2024. There is no dividend in arrear for the preference shares. Instructions (a.) Journalize the transactions and the closing entry for net income and dividend. (b.) Prepare the equity section of the statement of financial position at December 31, 2023.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...
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Transcribed Image Text:Question 2
At December 31, 2023, Credit Ltd. had a credit balance of $15,000 in Allowance for Doubtful
Accounts. During 2024, Credit wrote off accounts totaling $14,100. One of those accounts
($1,800) was later collected. At December 31, 2024, an aging schedule indicated that the balance
in Allowance for Doubtful Accounts should be $17,800.
Instructions
Prepare journal entries to record the 2024 transactions and the adjusting entry for bad debt on 31
December 2024.
Question 3
The equity accounts of Medium Ltd. on January 1, 2023, were as follows.
Share Capital Preference (9%, $50 par, cumulative, 10,000 shares
authorized, 8,000 shares issued)
$400,000
Share Capital Ordinary ($1 par value, 2,000,000 shares authorized,
1,000,000 shares issued)
1,000,000
Share Premium-Preference
Share Premium-Ordinary
100,000
1,450,000
1,816,000
50,000
Retained Earnings
Treasury Shares-Ordinary (20,000 shares)
During 2023, the corporation had the following transactions and events pertaining to its equity.
Feb. 1
Issued 37,000 ordinary shares for $152,000.
Apr. 14
Sold 9,000 treasury shares-ordinary for $42,000.
Nov. 10
Dec. 31
Dec. 31
Purchased 1,200 ordinary shares for the treasury at a cost of $8,000.
Determined that net income for the year was $452,000. Close the income
summary account.
Declared a dividend of $0.5 per ordinary share, to be payable in April
2024. There is no dividend in arrear for the preference shares.
Instructions
(a.) Journalize the transactions and the closing entry for net income and dividend.
(b.) Prepare the equity section of the statement of financial position at December 31, 2023.
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