### Educational Content: Preparing an Income Statement**Objective:**Learn how to prepare an income statement using an adjusted trial balance.**Adjusted Trial Balance for Fair Trader Company:**- Factoring fees: $300- Interest revenue: $3,000- Insurance expense: $4,000- Salaries expense: $22,000- Sales: $50,000- Supplies expense: $200- Rent expense: $15,000- Bad debt expense: $1,000**Income Statement Preparation:****FAIR TRADER COMPANY** **Income Statement** **For Year Ended December 31****Revenues:**- Interest revenue: - Total revenues: **Expenses:***The space for expenses is not filled in the image. Calculations should include all listed expenses from the adjusted trial balance.***Instructions:**- **Step 1:** List all revenue sources and calculate total revenue.- **Step 2:** Document all expense categories, including salaries, rent, insurance, supplies, and bad debt expenses.- **Step 3:** Calculate the total expenses by summing up individual expenses.- **Step 4:** Determine the net income by subtracting total expenses from total revenues.This process demonstrates how to translate financial data from an adjusted trial balance into a structured income statement, providing insights into company profitability.

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Description: ### Educational Content: Preparing an Income Statement**Objective:**Learn how to prepare an income statement using an adjusted trial balance.**Adjusted Trial Balance for Fair Trader Company:**- Factoring fees: $300- Interest revenue: $3,000- Insuran

Income statement is the financial statement which is prepared to depict the profitability of the…

Business

Accounting

Selected accounts from Fair Trader Company's adjusted trial balance for the year ended December 31 follow. $300 Interest revenue 4,000 Salaries expense 50,000 Supplies expense 15,000 Bad debt expense $ 3,000 22,000 200 1,000 Factoring fees Insurance expense Sales Rent expense Prepare its income statement. Revenues FAIR TRADER COMPANY Income Statement For Year Ended December 31 Interest revenue Total revenues Expenses $ LO

Selected accounts from Fair Trader Company's adjusted trial balance for the year ended December 31 follow. $300 Interest revenue 4,000 Salaries expense 50,000 Supplies expense 15,000 Bad debt expense $ 3,000 22,000 200 1,000 Factoring fees Insurance expense Sales Rent expense Prepare its income statement. Revenues FAIR TRADER COMPANY Income Statement For Year Ended December 31 Interest revenue Total revenues Expenses $ LO

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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Estimating Uncollectible Accounts and Reporting Accounts Receivable LaFond Company analyzes its accounts receivable at December 31, and arrives at the age categories below along with the percentages that are estimated as uncollectible. Accounts Estimated Receivable Loss % $ 90,000 20,000 11,000 6,000 Over 180 days past due 4,000 Total accounts receivable $ 131,000 Age Group 0-30 days past due 31-60 days past due 61-120 days past due 121-180 296 4 The balance of the allowance for uncollectible accounts is $520 on December 31, before any adjustments. Transaction Record bad debts expense 5 10 25 (a) What amount of bad debts expense will LaFond report in its income statement for the year? $0 Cash Asset (b) Use the financial statement effects template to record LaFond's bad debts expense for the year. Use negative signs with your answers, when appropriate. Noncash Assets Balance Sheet Liabilities Contributed Capital (c) What is the balance of accounts receivable on it December 31 balance…
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $635,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,860,000. Bad debt expense is estimated at 1.25% of sales. 1. Determine the amount of the adjusting entry for uncollectible accounts. 2. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense $635,000 ✓ 3. Determine the net realizable value of accounts receivable.
Estimating Bad Debts Expense and Reporting Receivables At December 31, Barber Company had a balance of $630,000 in its accounts receivable and an unused balance of $3,900 in its allowance for uncollectible accounts. The company then aged its accounts as follows. Current $519,000 1-60 days past due 72,000 61-180 days past due 25,500 Over 180 days past due 13,500 Total accounts receivable $630,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 1-60 days past due, 15% of balances 61-180 days past due, and 40% of balances over 180 days past due. The company continues to base its allowance for uncollectible accounts on this aging analysis and percentages. a. What amount of bad debts expense does Barber report on its income statement for the year? $ 14,115 b. Show how Barber's December 31 balance sheet will report the accounts receivable and the allowance for uncollectible accounts. Note: Round your answers to the nearest whole dollar. Note: Do not use…
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Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $4,375,000; Allowance for Doubtful Accounts has a debit balance of $21,300; and sales for the year total $102,480,000. Bad debt expense is estimated at 1/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $4 Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable.
Accounts Receivable Analysis The following data are taken from the financial statements of Basinger Inc. Terms of all sales are 2/10, n/45. 20Υ3 20Y2 20Y1 Accounts receivable, end of year $476,800 $420,000 $377,000 Sales on account 4,125,280 3,347,400 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Y3 20Υ2 1. Accounts receivable turnover 2. Number of days' sales in receivables days days b. The collection of accounts receivable has This can be seen in both the in accounts receivable turnover and the in the collection period.
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