[The following information applies to the questions displayed below.] At the beginning of Year 1, a company has a balance of $24,800 in accounts receivable. Because the company is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of Year 1, the company wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that the company now will need to use the allowance method. The following transactions occur during Year 1 and Year 2. 1. During Year 1, install air conditioning systems on account, $178,000. 2. During Year 1, collect $173,000 from customers on account. 3. At the end of Year 1, estimate that uncollectible accounts total 20% of ending accounts receivable. 4. In Year 2, customers' accounts totaling $6,800 are written off as uncollectible.

[The following information applies to the questions displayed below.] At the beginning of Year 1, a company has a balance of $24,800 in accounts receivable. Because the company is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of Year 1, the company wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that the company now will need to use the allowance method. The following transactions occur during Year 1 and Year 2. 1. During Year 1, install air conditioning systems on account, $178,000. 2. During Year 1, collect $173,000 from customers on account. 3. At the end of Year 1, estimate that uncollectible accounts total 20% of ending accounts receivable. 4. In Year 2, customers' accounts totaling $6,800 are written off as uncollectible.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Tell me which option is Correct

A: Step 1: What is NSF Check NSF or not sufficient funds check is a check not honored by a bank because…

Q: Jayden Carla Vista owns Carla Vista Electric and indicates on December 31 the unadjusted balance per…

A: In Bank reconciliation, we reconcile the cash book and pass book balances.

Q: Accompanying a bank statement for Borden Company is a credit memo for $24,360 representing the…

A: The objective of the question is to understand how to journalize the entry for a credit memo…

Q: Coaster’s Co. earns 2% interest on their checking account. On the last bank statement, the bank only…

A: Bank reconciliation: It is a statement drawn up by the business to verify the cash book balance with…

Q: If a company recorded a check they wrote as $729 when it should have been recorded as being written…

A: Solution: - Introduction: - Bank reconciliation means every company would match the cash balances on…

Q: Accompanying a bank statement for Marsh Land Properties is a credit memo for payment on a $15,000…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: Accompanying a bank statement for Borden Company is a credit memo for $24,360 representing the…

A: The objective of the question is to understand how to journalize the entry for a note collected by…

Q: Accompanying a bank statement for Borden Company is a credit memo for $24,360 representing the…

A: The objective of the question is to understand how to journalize the entry for a credit memo…

Q: On June 30, 2021, the bank's records say that your company has $12,956.73 in its chequing account.…

A: Bank reconciliation statement is used to determine the differences between the bank statement…

Q: The following information relates to a company's accounts receivable: gross accounts receivable…

A: Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the…

Q: following deta November 30 following:

A: Here we have given balance as per books that will be our starting point. Then we will…

Q: Reconcile the ledger balance with Bank statement balance for March 2022 a) cheques issued to…

A: BRS, or Bank Reconciliation Statement, is a financial document or statement that is prepared to…

Q: Accompanying a bank statement for Borden Company is a credit memo for $21,200 representing the…

A: Cash received = $21,200 Note face value = $20,000 Interest = $1,200

Q: Coronado Corporation is preparing a bank reconciliation and has identified the following potential…

A: Bank reconciliation is the process of comparing a company's internal financial records with the…

Q: 1) The "I am Definitely Switching My Major to Accounting Company" received its bank statement for…

A: Lets understand the basics.Bank reconciliation statement is a statement which reconcile the balance…

Q: I need help with question

A: Step 1: Introduction to the Bank Reconciliation:A bank reconciliation involves comparing the balance…

Q: 1) Prepare a bank reconciliation dated December 31, 2020, for Welcome Inc. based on the following…

A: Here credit memo should be added back to balance as per books

Q: Accompanying a bank statement for Santee Company is a credit memo for $15,120 representing the…

A: In this question, As the amount is received so cash will be debited with the amount received $15,120…

Q: Accompanying bank statement for Borden Company is a credit memo for $15,225 representing the…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: . A company's bank statement shows a balance of $10,000, while its cash account in the company's…

A: The adjusted cash balance is the final cash balance after reconciling any discrepancies between the…

Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

Required:
1. Record each transaction using the allowance method. (If no entry is required for a particular transaction/event, select "No Journal
Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
1
2
3
4
>
During Year 1, collect $173,000 from customers on account.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
2

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

Accompanying a bank statement for Santee Company is a credit memo for $21,600 representing the principal ($20,000) and interest ($1,600) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries.Required:On March 1, journalize the entry that should be made by the company to bring the accounting records up to date. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Infinity Emporium Company received the monthly statement for its bank account, showing a balance of $67,300 on August 31. The balance in the Cash account in the company's accounting system at that date was $72,628. The company's accountant reviewed the statement and the company's accounting records and noted the following. 1. 2. 3. After comparing the cheques written by the company with those deducted from the bank account in August, the accountant determined that all six cheques (totalling $6,180) that had been outstanding at the end of July were processed by the bank in August. However, five cheques written in August, totalling $4,500, were outstanding on August 31. A review of the deposits showed that a deposit made by the company on July 31 for $11,532 was recorded by the bank on August 1, and an August 31 deposit of $13,300 was recorded in the company's accounting system but had not yet been recorded by the bank. The August bank statement also showed: a service fee of $24 a…
Accompanying a bank statement for Borden Company is a credit memo for $24,360 representing the principal ($24,000) and interest ($360) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Journalize the entry that should be made by the company to bring the accounting records up to date. If an amount box does not require an entry, leave it blank. blank Account Debit Credit blank
The accountant at Fidel Trading has received the November 2010 bank statement. She immediately inbestigate the difference between the bank accont balance of the cash book and the balance of the bank statement. the accountant has found the following discrepancies i. A cheque for $3,000 received from a debtor was deposited at the bank but no journal entry was made to record the transaction
Cheyenne Corporation is preparing a bank reconciliation and has identified the following potential reconciling items. (a) Deposit in transit $6,590. (b) Bank service charges $27. (Use Office Expense account.) (c) Interest credited to Cheyenne's account $41. (d) Outstanding checks $7,670. (e) NSF check returned $480. Prepare entries necessary to make Cheyenne's accounting records correct and complete. (If no entry is required, selec Do not indent manually.)
The Cash account of ReeseCorporation had a balance of $3,540 at October 31, 2018. Included were outstanding checkstotaling $1,800 and an October 31 deposit of $300 that did not appear on the bank statement.The bank statement, which came from Turnstone State Bank, listed an October 31 balance of$5,570. Included in the bank balance was an October 30 collection of $600 on account froma customer who pays the bank directly. The bank statement also showed a $30 service charge,$10 of interest revenue that Reese earned on its bank balance, and an NSF check for $50.Prepare a bank reconciliation to determine how much cash Reese actually had at October 31.
On December 31st, the cheque book balance of Bob's Burgers Ltd. was $1,301.31. The bank statement balance was $1,670.26. Cheques outstanding were $3,152.88. The statement revealed a deposit in transit of $2,815.35 as well as a bank service charge of $112.88. The company earned interest income of $44.30. Complete a bank reconciliation for Bob's Burgers Ltd. $1,332.73 $1,968.23 $1.514.04 $1,345.61 $1,414.19 $1,896.66 $1.269.89 $2.454.19
The cash account of SWITZER ltd. reported a balance of $2,500 at August 31,2020. Included were the outstanding cheques totalling $900 and on August 31 deposit of $500 that did not appear on the bank statement. The bank statement, which came from HSBC bank, listed on August 31,2020, balance of $3,405. Included in the bank balance was on August 30 collection of $550 on account from a customer who pays the bank directly. The bank statement also shows a $20 service charge, $10 of interest revenue that SWITZER earned on its bank balance and an NSF cheque for $35. Make the company’s journal entries for transactions that arise from the bank reconciliation. Include an explanation with each entry.
answer in text form please (without image)
Accompanying a bank statement for Santee Company is a credit memo for $24,516 representing the principal ($22,700) and interest ($1,816) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Required: On March 1, journalize the entry that should be made by the company to bring the accounting records up to date. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Abdulla Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on July 31, 2018, its Cash account shows an $25,000 debit balance. Abdulla Company’s July 31 bank statement shows $21,646 on deposit in the bank. Prepare a bank reconciliation for Abdulla Company using the following information: a)The July 31 bank statement included a $90 debit memorandum for bank services. b)Check No. 123, listed with the canceled checks, was correctly drawn for $1,437 in payment of a utility bill on July 15. Abdulla Company mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $1,473. c)In reviewing the bank statement, a $2,200 check written by Ayesha Company was mistakenly drawn against Abdulla’s account.