The following items pertain to the Current Assets section of the balance sheet for Jackson Corp. at the end of its accounting year, December 31, 2016. Each item must be considered and any necessary adjustment recognized. Additionally, the accountant for Jackson wants to develop the Current Assets section of the balance sheet as of the end of 2016. a Cash and cash equivalents amount to $19,375. A 9%, 120-day certificate of deposit was purchased on December 1, 2016, for $8,000. Gross accounts receivable at December 31, 2016, amount to $42,000. Before adjustment, the credit balance in Allowance for Doubtful Accounts is $340. Based on past experience, the accountant estimates that 3% of the gross accounts receivable outstanding at December 31, 2016, will prove to be uncollectible. d. A customer's 12%, 90-day promissory note in the amount of $4,000 is held at the end of the year. The note has been held for 45 days during 2016. Required: C 1. Record the adjusting entries required in (b), (c), and (d). 2. Prepare the Current Assets section of Jackson's balance sheet as of December 31, 2016. In addition to the information in the preceding items, the balances in Inventory and Prepaid Insurance on this date are $65,000 and $4,800, respectively.
The following items pertain to the Current Assets section of the balance sheet for Jackson Corp. at the end of its accounting year, December 31, 2016. Each item must be considered and any necessary adjustment recognized. Additionally, the accountant for Jackson wants to develop the Current Assets section of the balance sheet as of the end of 2016. a Cash and cash equivalents amount to $19,375. A 9%, 120-day certificate of deposit was purchased on December 1, 2016, for $8,000. Gross accounts receivable at December 31, 2016, amount to $42,000. Before adjustment, the credit balance in Allowance for Doubtful Accounts is $340. Based on past experience, the accountant estimates that 3% of the gross accounts receivable outstanding at December 31, 2016, will prove to be uncollectible. d. A customer's 12%, 90-day promissory note in the amount of $4,000 is held at the end of the year. The note has been held for 45 days during 2016. Required: C 1. Record the adjusting entries required in (b), (c), and (d). 2. Prepare the Current Assets section of Jackson's balance sheet as of December 31, 2016. In addition to the information in the preceding items, the balances in Inventory and Prepaid Insurance on this date are $65,000 and $4,800, respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The following items pertain to the Current Assets section of the balance sheet for Jackson Corp. at the end of its accounting year, December 31, 2016. Each item must be considered and any necessary adjustment recognized. Additionally, the accountant
for Jackson wants to develop the Current Assets section of the balance sheet as of the end of 2016.
a. Cash and cash equivalents amount to $19,375.
b.
A 9%, 120-day certificate of deposit was purchased on December 1, 2016, for $8,000.
C.
Gross accounts receivable at December 31, 2016, amount to $42,000. Before adjustment, the credit balance in Allowance for Doubtful Accounts is $340. Based on past experience, the accountant estimates that 3% of the gross accounts receivable
outstanding at December 31, 2016, will prove to be uncollectible.
d. A customer's 12%, 90-day promissory note in the amount of $4,000 is held at the end of the year. The note has been held for 45 days during 2016.
Required:
1. Record the adjusting entries required in (b), (c), and (d).
2. Prepare the Current Assets section of Jackson's balance sheet as of December 31, 2016. In addition to the information in the preceding items, the balances in Inventory and Prepaid Insurance on this date are $65,000 and $4,800, respectively.
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