ACCOUTING PRIN SET LL INCLUSIVE
ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Chapter 11, Problem 1DIE

(1)

To determine

Interest expense: The charges on the finance or loan availed from various sources are called interest expense. Interest expenses are recorded when due and paid as per the term of the loan.

Sales tax: The additional amount paid by the buyer over and above the cost of goods plus profit margin of the manufacturer is known as sales tax. Company records this tax as the sales tax payable because it needs to be paid to tax authorities.

Accrued revenue: It is the part of total revenue that is earned during the current period of accounting but not received. Accounts report this amount as revenue of a company.

To compute: The interest expense incurred.

2.

To determine

To compute: Sales tax payable.

3.

To determine

To compute: Amount of subscription to be recognized.

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ayco Inc. started its operations in 2022. Its sales during 2022, all on account, totalled $700,000. The company collected $500,000 in cash from customers during the year and wrote off $8,000 in uncollectible accounts. The company set up an allowance for doubtful accounts at December 31, 2022, its fiscal year-end, and determined the account balance to be $14,000.   The unadjusted balances of selected accounts at December 31, 2023 are as follows:     Accounts receivable $ 300,000   Allowance for doubtful accounts (debit)   10,000   Sales revenue (including 80 percent in sales on account)   800,000       Aging of the accounts receivable on December 31, 2023, resulted in an estimate of $11,000 in potentially uncollectible accounts.   Required: 1. Prepare the journal entries to record all the transactions during 2022 and post them to appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)…
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