This is a new manufacturing corporation that issued $50000 common stock for cash on thefirst day. All overhead expenses are paid immediately by cash. To make it easy, there are noother operating expenses and no income tax. No Dividend is declared for the year. Post alljournal entries in the General Ledger T - accounts and using their respective balances preparean Income Statment and Balance Sheet for the first month of the operation. Use a blank paperfor posting into General Ledger and preparation of the financial statements.

First, we need to record the transactions in the general journal. The journal entry for the issuance…

Answered: This is a new manufacturing corporation…

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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The company estimates future uncollectible accounts. The company determines $16,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
On December 31, 20X1, the company reported a debit balance of $200,000 in accounts receivable and a credit balance of $5,000 in the allowance for expected credit losses. December 31 is the company’s reporting date. During 20X2, the company had the following transactions: a. The company made a credit sale of $300,000. b. The company collected accounts receivable for 350,000. c. The company wrote off the uncollectible accounts for $12,000. d. The company collected the receivable of $4,000 that had been written off previously. Required Note: Show calculation: (1) Prepare journal entries to record the above four transactions. (2) Assume that 2% of the company’s accounts receivable cannot be collected, prepare the adjusting journal entry at the end of 20X2.
The following transactions apply to Jova Company for Year 1, the first year of operation: Issued $13,500 of common stock for cash. Recognized $68,500 of service revenue earned on account. Collected $60,800 from accounts receivable. Paid operating expenses of $35,600. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 2 percent of sales on account. The following transactions apply to Jova for Year 2: Recognized $76,000 of service revenue on account. Collected $68,800 from accounts receivable. Determined that $970 of the accounts receivable were uncollectible and wrote them off. Collected $200 of an account that had previously been written off. Paid $49,200 cash for operating expenses. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1.0…
[The following information applies to the questions displayed below.] Roth Incorporated experienced the following transactions for Year 1, its first year of operations: Issued common stock for $80,000 cash. Purchased $245,000 of merchandise on account. Sold merchandise that cost $152,000 for $302,000 on account. Collected $244,000 cash from accounts receivable. Paid $230,000 on accounts payable. Paid $48,000 of salaries expense for the year. Paid other operating expenses of $37,000. Roth adjusted the accounts using the following information from an accounts receivable aging schedule. Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance Current $34,800 0.01 0 to 30 14,500 0.05 31 to 60 2,900 0.10 61 to 90 2,900 0.20 Over 90 days 2,900 0.50 b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Roth Incorporated for Year 1. could you take a look at…
In providing accounting services to small businesses, you encounter the following situations. Sunland Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are pre-tax sales of sales $6,100 plus GST of $305 and PST of $488. 2. Jennifer Corporation receives its annual property tax bill in the amount of $8,400 on May 31. (i) During the month of March, Ayayai Corporation's employees earned gross salaries of $60,000. Withholdings deducted from employee earnings related to these salaries were $3,254 for CPP, $948 for El, $7,820 for income taxes. (ii) Ayayai's employer portions were $3,254 for CPP and $1,327 for El for the month. 1. 3. Prepare the journal entries to record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit…
On November 1 of the current year, Rob Elliot invested $30,500.00 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000.00. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected items on December 31 follow. On that date, the financial statements were prepared. The balance sheet reported total assets of $54,400.00 and total stockholders' equity of $38,955.00. 6. What is the amount of profit or loss during December? 7. What were the total expenses for December? 8. How much was paid for rent?
The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: Apr. 13 Wrote off account of Dean Sheppard, $8,290. May 15 Received $420 as partial payment on the $7,220 account of Dan Pyle. Wrote off the remaining balance as uncollectible. July 27 Received $8,290 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt. Dec. 31 Wrote off the following accounts as uncollectible (record as one journal entry): Paul Chapman $2,280 Duane DeRosa 3,535 Teresa Galloway 4,625 Ernie Klatt 1,095 Marty Richey 1,800 31 If necessary, record the year-end adjusting entry for uncollectible accounts. Required: A. Journalize the transactions under the direct write-off method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. B. Journalize the transactions under the allowance method.…
Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation. Events Affecting Year 1 Provided $33,520 of cleaning services on account. Collected $26,816 cash from accounts receivable. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Events Affecting Year 2 Wrote off a $251 account receivable that was determined to be uncollectible. Provided $39,118 of cleaning services on account. Collected $34,619 cash from accounts receivable. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Required Record the events for Year 1 and Year 2 (including closing entries for Year 1) in T-accounts. Determine the following amounts: (1) Net income for Year 1. (2) Net cash flow from operating activities for Year 1. (3) Balance of accounts…
Brady Corporation is preparing an income statement for year ended 12/31/20. During the final week of 2020, Brady earned revenues of $6,000 on account. It expects to collect the $6,000 on 1/10/21. Brady also incurred $1,500 of payroll costs which will be paid to employees on 1/15/21. Brady also paid cash of $500 for office cleaning services. No other transactions occurred in 2020. What is the net income of Brady Corporation if it uses cash basis accounting?
The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: apr13 Wrote off account of Dean Sheppard, $8,450 may15 Received $500 as partial payment on the $7,100 account of Dan Pyle. Wrote off the remaining balance as uncollectible july27 Received $8,450 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt. dec31 Wrote off the following accounts as uncollectible (record as one journal entry): 31. If necessary, record the year-end adjusting entry for uncollectible accounts.a. Journalize the transactions under the direct write-off method.b. Journalize the transactions under the allowance method. Shipway Company usesthe percent of credit sales method of estimating uncollectible accounts expense.Based on past history and industry averages, ¾% of credit sales are expected to beuncollectible. Shipway Company recorded $3,778,000 of…

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