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The company estimates tuture uncollectible accounts. The company determines $4,700 of accounts receivable on January 31 are past due, and 35% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts Note: Enter debits before credits. Date Credit General Journal Debit January 31

The company estimates tuture uncollectible accounts. The company determines $4,700 of accounts receivable on January 31 are past due, and 35% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts Note: Enter debits before credits. Date Credit General Journal Debit January 31

FINANCIAL ACCOUNTING
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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Part 2 asks to record the adjustment for uncollectable accounts

The image provides a scenario for estimating future uncollectible accounts in a company, along with a journal entry form for accounting purposes. Instructions: The company estimates future uncollectible accounts. Specifically, they determine that $4,700 of accounts receivable on January 31 are past due, and 35% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. A hint suggests using the January 31 accounts. Table Structure: - The table is titled "General Journal" and includes the following columns: Date, General Journal, Debit, and Credit. The single row in the table is partially filled: - Date: January 31 - General Journal: (Empty) - Debit: (Empty) - Credit: (Empty) There are buttons below the table for actions: - "Record entry" - "Clear entry" - "View general journal" Note: A reminder is included to enter debits before credits.
Transcribed Image Text:The image provides a scenario for estimating future uncollectible accounts in a company, along with a journal entry form for accounting purposes. Instructions: The company estimates future uncollectible accounts. Specifically, they determine that $4,700 of accounts receivable on January 31 are past due, and 35% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. A hint suggests using the January 31 accounts. Table Structure: - The table is titled "General Journal" and includes the following columns: Date, General Journal, Debit, and Credit. The single row in the table is partially filled: - Date: January 31 - General Journal: (Empty) - Debit: (Empty) - Credit: (Empty) There are buttons below the table for actions: - "Record entry" - "Clear entry" - "View general journal" Note: A reminder is included to enter debits before credits.
**Transcription of Big Blast Fireworks Ledger Information** **General Ledger Account Balances on January 1, 2021:** | Accounts | Debit | Credit | |-----------------------------------------|-----------|-----------| | Cash | $23,300 | | | Accounts Receivable | $48,500 | | | Allowance for Uncollectible Accounts | | $4,500 | | Inventory | $37,800 | | | Supplies | $1,300 | | | Land | $42,100 | | | Note Payable (6%, due in 3 years) | | $28,900 | | Common Stock | | $62,000 | | Retained Earnings | | $55,600 | | Total | $172,400 | $172,400 | **Inventory Details:** - **Beginning Balance:** $37,800 consisting of 370 units at $100 each. - **January Transactions:** - Purchase 1: 1,080 units for $162,000 ($150 each) - Purchase 2: 1,700 units for $187,000 ($110 each) - Purchase 3: 1,800 units for $216,000 ($120 each) - Sale 1: 920 units to customers on account - Sale 2: 1,100 units to customers on account **Cost of Goods Sold:** Determined using a FIFO perpetual inventory system **Inventory on January 31, 2021:** 2,930 units **Information Available on January 31, 2021:** a. Estimated sale price in February: Remaining units expected to sell for only $100 each. b. Future uncollectible accounts: - $4,700 of accounts receivable on January 31 is past due. - 35% estimated uncollectible. - Remaining accounts receivable: 5% estimated uncollectible. c. Interest expenses on notes payable for January, paid each December 31. d. Accrued income taxes for January: $13,000. **Instructions for Adjusting Entries:** 1. **Estimating Inventory Value:** - Record adjusting entry for net realizable value of inventory. 2. **Uncollectible Accounts:** - Assess the
Transcribed Image Text:**Transcription of Big Blast Fireworks Ledger Information** **General Ledger Account Balances on January 1, 2021:** | Accounts | Debit | Credit | |-----------------------------------------|-----------|-----------| | Cash | $23,300 | | | Accounts Receivable | $48,500 | | | Allowance for Uncollectible Accounts | | $4,500 | | Inventory | $37,800 | | | Supplies | $1,300 | | | Land | $42,100 | | | Note Payable (6%, due in 3 years) | | $28,900 | | Common Stock | | $62,000 | | Retained Earnings | | $55,600 | | Total | $172,400 | $172,400 | **Inventory Details:** - **Beginning Balance:** $37,800 consisting of 370 units at $100 each. - **January Transactions:** - Purchase 1: 1,080 units for $162,000 ($150 each) - Purchase 2: 1,700 units for $187,000 ($110 each) - Purchase 3: 1,800 units for $216,000 ($120 each) - Sale 1: 920 units to customers on account - Sale 2: 1,100 units to customers on account **Cost of Goods Sold:** Determined using a FIFO perpetual inventory system **Inventory on January 31, 2021:** 2,930 units **Information Available on January 31, 2021:** a. Estimated sale price in February: Remaining units expected to sell for only $100 each. b. Future uncollectible accounts: - $4,700 of accounts receivable on January 31 is past due. - 35% estimated uncollectible. - Remaining accounts receivable: 5% estimated uncollectible. c. Interest expenses on notes payable for January, paid each December 31. d. Accrued income taxes for January: $13,000. **Instructions for Adjusting Entries:** 1. **Estimating Inventory Value:** - Record adjusting entry for net realizable value of inventory. 2. **Uncollectible Accounts:** - Assess the
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