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1. Record the January 1 credit balance of $25,685 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).

1. Record the January 1 credit balance of $25,685 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).

FINANCIAL ACCOUNTING
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 following transactions were completed by Irvine Company during the current fiscal year ended December 31:
 
 
Required: 1. Record the January 1 credit balance of $25,685 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 $17,710,000 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.
Instructions Chart of Accounts T-Accounts The following transactions were completed by Irvine Company during the current fiscal year ended December 31: CHART OF ACCOUNTS 1. Record the January 1 credit balance of $25,685 in a T-account for Allowance for Doubtful Accounts Feb. 8 Received 45% of the $18,700 balance owed by DeCoy Co., a bankrupt business, and wrote off the 2. B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Irvine Company remainder as uncollectible. Bad Debt Expense. General Ledger May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,270 cash in full payment of Seth's account. ASSETS REVENUE Aug. 13 Wrote off the $6,360 balance owed by Kat Tracks Co., which has no assets. Allowance for Doubtful Accounts 110 Cash 410 Sales Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as Jan. 1 Balance 111 Petty Cash 610 Interest Revenue uncollectible. Journalized the receipt of $3,975 cash in full payment of the account. 121 Accounts Receivable-DeCoy Co. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,265; Bonneville 122 Accounts Receivable-Seth Nelsen EXPENSES Co., $5,595; Crow Distributors, $9,305; Fiber Optics, S1,150. 123 Accounts Receivable-Kat Tracks Co. 510 Cost of Goods Sold Dec. 31 Based on an analysis of the $1,759,500 of accounts receivable, it was estimated that $35,190 will be uncollectible. Journalized the adjusting entry. 124 Accounts Receivable-Crawford Co. 520 Sales Salaries Expense Dec. 31 Adj. Balance 125 Accounts Receivable-Newbauer Co. 521 Advertising Expense 1. Record the January 1 credit balance of $25,685 in a T-account for Allowance for Doubtful Accounts. 126 Accounts Receivable-Bonneville Co. 522 Depreciation Expense-Store Equipment Bad Debt Expense 2. A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. 127 Accounts Receivable-Crow Distributors 523 Delivery Expense B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad 128 Accounts Receivable-Fiber Optics 524 Repairs Expense Debt Expense. 129 Allowance for Doubtful Accounts 529 Selling Expenses 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting 131 Interest Receivable 530 Office Salaries Expense entry). 132 Notes Receivable 531 Rent Expense Journal 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had 141 Merchandise Inventory 532 Depreciation Expense-Office Equipment been based on an estimated expense of 4 of 1% of the net sales of $17,710,000 for the year, determine the following: 145 Office Supplies 533 Insurance Expense A. Bad debt expense for the year. 2. A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. 146 Store Supplies 534 Office Supplies Expense B. Balance in the allowance account after the adjustment of December 31. 151 Prepaid Insurance 535 Store Supplies Expense C. Expected net realizable value of the accounts receivable as of December 31. 536 Credit Card Expense 181 Land PAGE 10 191 Store Equipment 537 Cash Short and Over JOURNAL ACCOUNTING EQUATION 192 Accumulated Depreciation-Store Equipment 538 Bad Debt Expense DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 193 Office Equipment 539 Miscellaneous Expense 194 Accumulated Depreciation-Office Equipment 710 Interest Expense 2 Final Questions 3 LIABILITIES 4 210 Accounts Payable 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting 5 211 Salaries Payable entry). 6 213 Sales Tax Payable $ 214 Interest Payable 215 Notes Payable 8 9 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 EQUITY had been based on an estimated expense of 4 of 1% of the net sales of $17,710,000 for the year, determine the following: 10 310 Common Stock 11 A. Bad debt expense for the year. $ 311 Retained Earnings 12 312 Dividends B. Balance in the allowance account after the adjustment of December 31. $ 13 14 C. Expected net realizable value of the accounts receivable as of December 31. $ 15 16 17 18 19 20
Transcribed Image Text:Instructions Chart of Accounts T-Accounts The following transactions were completed by Irvine Company during the current fiscal year ended December 31: CHART OF ACCOUNTS 1. Record the January 1 credit balance of $25,685 in a T-account for Allowance for Doubtful Accounts Feb. 8 Received 45% of the $18,700 balance owed by DeCoy Co., a bankrupt business, and wrote off the 2. B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Irvine Company remainder as uncollectible. Bad Debt Expense. General Ledger May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,270 cash in full payment of Seth's account. ASSETS REVENUE Aug. 13 Wrote off the $6,360 balance owed by Kat Tracks Co., which has no assets. Allowance for Doubtful Accounts 110 Cash 410 Sales Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as Jan. 1 Balance 111 Petty Cash 610 Interest Revenue uncollectible. Journalized the receipt of $3,975 cash in full payment of the account. 121 Accounts Receivable-DeCoy Co. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,265; Bonneville 122 Accounts Receivable-Seth Nelsen EXPENSES Co., $5,595; Crow Distributors, $9,305; Fiber Optics, S1,150. 123 Accounts Receivable-Kat Tracks Co. 510 Cost of Goods Sold Dec. 31 Based on an analysis of the $1,759,500 of accounts receivable, it was estimated that $35,190 will be uncollectible. Journalized the adjusting entry. 124 Accounts Receivable-Crawford Co. 520 Sales Salaries Expense Dec. 31 Adj. Balance 125 Accounts Receivable-Newbauer Co. 521 Advertising Expense 1. Record the January 1 credit balance of $25,685 in a T-account for Allowance for Doubtful Accounts. 126 Accounts Receivable-Bonneville Co. 522 Depreciation Expense-Store Equipment Bad Debt Expense 2. A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. 127 Accounts Receivable-Crow Distributors 523 Delivery Expense B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad 128 Accounts Receivable-Fiber Optics 524 Repairs Expense Debt Expense. 129 Allowance for Doubtful Accounts 529 Selling Expenses 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting 131 Interest Receivable 530 Office Salaries Expense entry). 132 Notes Receivable 531 Rent Expense Journal 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had 141 Merchandise Inventory 532 Depreciation Expense-Office Equipment been based on an estimated expense of 4 of 1% of the net sales of $17,710,000 for the year, determine the following: 145 Office Supplies 533 Insurance Expense A. Bad debt expense for the year. 2. A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. 146 Store Supplies 534 Office Supplies Expense B. Balance in the allowance account after the adjustment of December 31. 151 Prepaid Insurance 535 Store Supplies Expense C. Expected net realizable value of the accounts receivable as of December 31. 536 Credit Card Expense 181 Land PAGE 10 191 Store Equipment 537 Cash Short and Over JOURNAL ACCOUNTING EQUATION 192 Accumulated Depreciation-Store Equipment 538 Bad Debt Expense DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 193 Office Equipment 539 Miscellaneous Expense 194 Accumulated Depreciation-Office Equipment 710 Interest Expense 2 Final Questions 3 LIABILITIES 4 210 Accounts Payable 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting 5 211 Salaries Payable entry). 6 213 Sales Tax Payable $ 214 Interest Payable 215 Notes Payable 8 9 4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 EQUITY had been based on an estimated expense of 4 of 1% of the net sales of $17,710,000 for the year, determine the following: 10 310 Common Stock 11 A. Bad debt expense for the year. $ 311 Retained Earnings 12 312 Dividends B. Balance in the allowance account after the adjustment of December 31. $ 13 14 C. Expected net realizable value of the accounts receivable as of December 31. $ 15 16 17 18 19 20
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