FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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CHART OF ACCOUNTS
Shelton Corporation
General Ledger
ASSETS
REVENUE
111 Cash
411 Sales Revenue
121 Accounts Receivable
122 Allowance for Doubtful Accounts
EXPENSES
141 Inventory
500 Cost of Goods Sold
152 Prepaid Insurance
511 Insurance Expense
181 Equipment
512 Utilities Expense
198 Accumulated Depreciation
521 Salaries Expense
532 Bad Debt Expense
LIABILITIES
540 Interest Expense
211 Accounts Payable
541 Depreciation Expense
231 Salaries Payable
559 Miscellaneous Expenses
250 Unearned Revenue
910 Income Tax Expense
261 Income Taxes Payable
EQUITY
311 Common Stock
331 Retained Earnings
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Transcribed Image Text:CHART OF ACCOUNTS Shelton Corporation General Ledger ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 122 Allowance for Doubtful Accounts EXPENSES 141 Inventory 500 Cost of Goods Sold 152 Prepaid Insurance 511 Insurance Expense 181 Equipment 512 Utilities Expense 198 Accumulated Depreciation 521 Salaries Expense 532 Bad Debt Expense LIABILITIES 540 Interest Expense 211 Accounts Payable 541 Depreciation Expense 231 Salaries Payable 559 Miscellaneous Expenses 250 Unearned Revenue 910 Income Tax Expense 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings
The following information is extracted from Shelton Corporation's accounting records at the beginning of 2016:
Accounts Receivable
$67,000
Allowance for Doubtful Accounts
1,300
(credit)
During 2016, sales on credit amounted to $582,000, $552,800 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance.
Required:
1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2016.
2. Prepare the Accounts Receivable section of Shelton's December 31, 2016, balance sheet.
3. Compute Shelton's receivables turnover. (Round to one decimal place.)
4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section
Requirement 2?
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Transcribed Image Text:The following information is extracted from Shelton Corporation's accounting records at the beginning of 2016: Accounts Receivable $67,000 Allowance for Doubtful Accounts 1,300 (credit) During 2016, sales on credit amounted to $582,000, $552,800 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2016. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2016, balance sheet. 3. Compute Shelton's receivables turnover. (Round to one decimal place.) 4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section Requirement 2?
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