The following transactions were completed by Irvine Company during the current fiscal year ended December 31: Feb. 8 Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,350 cash in full payment of Seth’s account. Aug. 13 Wrote off the $6,400 balance owed by Kat Tracks Co., which has no assets. Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,880 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,190; Bonneville Co., $5,500; Crow Distributors, $9,400; Fiber Optics, $1,110. Dec. 31 Based on an analysis of the $1,785,000 of accounts receivable, it was estimated that $35,700 will be uncollectible. Journalized the adjusting entry. 1. Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts. 2. A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense. 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the net sales of $18,200,000 for the year, determine the following: A. Bad debt expense for the year. B. Balance in the allowance account after the adjustment of December 31. C. Expected net realizable value of the accounts receivable as of December 31. CHART OF ACCOUNTS Irvine Company General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-DeCoy Co. 122 Accounts Receivable-Seth Nelsen 123 Accounts Receivable-Kat Tracks Co. 124 Accounts Receivable-Crawford Co. 125 Accounts Receivable-Newbauer Co. 126 Accounts Receivable-Bonneville Co. 127 Accounts Receivable-Crow Distributors 128 Accounts Receivable-Fiber Optics 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense 1. Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts. 2. B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

The following transactions were completed by Irvine Company during the current fiscal year ended December 31: Feb. 8 Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,350 cash in full payment of Seth’s account. Aug. 13 Wrote off the $6,400 balance owed by Kat Tracks Co., which has no assets. Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,880 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,190; Bonneville Co., $5,500; Crow Distributors, $9,400; Fiber Optics, $1,110. Dec. 31 Based on an analysis of the $1,785,000 of accounts receivable, it was estimated that $35,700 will be uncollectible. Journalized the adjusting entry. 1. Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts. 2. A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense. 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the net sales of $18,200,000 for the year, determine the following: A. Bad debt expense for the year. B. Balance in the allowance account after the adjustment of December 31. C. Expected net realizable value of the accounts receivable as of December 31. CHART OF ACCOUNTS Irvine Company General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-DeCoy Co. 122 Accounts Receivable-Seth Nelsen 123 Accounts Receivable-Kat Tracks Co. 124 Accounts Receivable-Crawford Co. 125 Accounts Receivable-Newbauer Co. 126 Accounts Receivable-Bonneville Co. 127 Accounts Receivable-Crow Distributors 128 Accounts Receivable-Fiber Optics 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense 1. Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts. 2. B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

The following transactions were completed by Irvine Company during the current fiscal year ended December 31:

Feb. 8	Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible.
May 27	Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,350 cash in full payment of Seth’s account.
Aug. 13	Wrote off the $6,400 balance owed by Kat Tracks Co., which has no assets.
Oct. 31	Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,880 cash in full payment of the account.
Dec. 31	Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,190; Bonneville Co., $5,500; Crow Distributors, $9,400; Fiber Optics, $1,110.
Dec. 31	Based on an analysis of the $1,785,000 of accounts receivable, it was estimated that $35,700 will be uncollectible. Journalized the adjusting entry.

Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts.

A.	Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).

Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the net sales of $18,200,000 for the year, determine the following:

A.	Bad debt expense for the year.
B.	Balance in the allowance account after the adjustment of December 31.
C.	Expected net realizable value of the accounts receivable as of December 31.

CHART OF ACCOUNTS

Irvine Company

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-DeCoy Co.
122	Accounts Receivable-Seth Nelsen
123	Accounts Receivable-Kat Tracks Co.
124	Accounts Receivable-Crawford Co.
125	Accounts Receivable-Newbauer Co.
126	Accounts Receivable-Bonneville Co.
127	Accounts Receivable-Crow Distributors
128	Accounts Receivable-Fiber Optics
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Record the January 1 credit balance of $26,000 in a T-account for Allowance for Doubtful Accounts.

B.	Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

Allowance for Doubtful Accounte
Feb. 8 V
Jan. 1 Balance
Aug. 13V
May 27
Dec. 31 v
Oct. 31V
Dec. 31 Adjuating Entry v
Dec. 31 Unadjueted Balance v
Dec. 31 Adj. Balance
Bad Debt Expense
Dec. 31 Adjueting Entry
2 A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account tiles
Question not attempted.
PAGE 10
JOURNAL
Score: 0/249
ACCOUNTING EQUJATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY

11
14
16
17
3 Determine the expected net realizable value of the accounts recelvable as of December 31 (after al of the adjustments and the adjusting entry).
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of recelvables, the agjusting entry on December 31 had been based on an estimated expense of % of 15% of the net sales of $18,200,000 for the year, determine the following:
A. Bad debt expeane for the year. S
B. Balance in the allowance account after the adjustment of December 31. S
C. Expected net realizable value of the accounts receivable as of December 31. S

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