When examining the accounts of Palma Company, you ascertain that balance relating to both receivables and payables are included in a single controlling account (called receivables), which has a P23,050 debit balance. An analysis of the details of this account revealed the following: Items Debit Credit Accounts Receivable - customers P 40,000 Accounts receivable - officers (Current collection expected) 2,500 Debit balances - creditors 450 Expense advances to salespersons 1,000 Share capital subscriptions receivable 4,600 Accounts payable for merchandise P 19,250 Unpaid salaries 3,300 Credit balance in customer accounts 2,000 Cash received in advance from customers for goods not yet shipped 450 Expected bad debts, cumulative 500 Required: 1. Give the journal entry to eliminate the above account and to set up the appropriate accounts to replace it.
When examining the accounts of Palma Company, you ascertain that balance relating to both receivables and payables are included in a single controlling account (called receivables), which has a P23,050 debit balance. An analysis of the details of this account revealed the following: Items Debit Credit Accounts Receivable - customers P 40,000 Accounts receivable - officers (Current collection expected) 2,500 Debit balances - creditors 450 Expense advances to salespersons 1,000 Share capital subscriptions receivable 4,600 Accounts payable for merchandise P 19,250 Unpaid salaries 3,300 Credit balance in customer accounts 2,000 Cash received in advance from customers for goods not yet shipped 450 Expected bad debts, cumulative 500 Required: 1. Give the journal entry to eliminate the above account and to set up the appropriate accounts to replace it.
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:James A. Heintz, Robert W. Parry
Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business
Section: Chapter Questions
Problem 4SEB: FINANCIAL RATIOS Based on the financial statements, shown on pages 605606, for McDonald Carpeting...
Related questions
Question
When examining the accounts of Palma Company, you ascertain that balance relating to both
receivables and payables are included in a single controlling account (called receivables),
which has a P23,050 debit balance. An analysis of the details of this account revealed the
following:
Items | Debit | Credit |
P 40,000 | ||
Accounts receivable - officers (Current collection expected) | 2,500 | |
Debit balances - creditors | 450 | |
Expense advances to salespersons | 1,000 | |
Share capital subscriptions receivable | 4,600 | |
Accounts payable for merchandise | P 19,250 | |
Unpaid salaries | 3,300 | |
Credit balance in customer accounts | 2,000 | |
Cash received in advance from customers for goods not yet shipped | 450 | |
Expected |
500 |
Required:
1. Give the
accounts to replace it.
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!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
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.Recommended textbooks for you
College Accounting, Chapters 1-27 (New in Account…
Accounting
ISBN:
9781305666160
Author:
James A. Heintz, Robert W. Parry
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27 (New in Account…
Accounting
ISBN:
9781305666160
Author:
James A. Heintz, Robert W. Parry
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning