The Bookkeeper of Kenneth's Toyland presented the following ledger accounts and their balances as of June 30, 2018, the end of the fiscal period: Account Titles Cash In Bank 487288 Cash On Hand 75200 Accounts Receivable 112000 Allowance for Bad Debts 4000 Notes Receivable 4800 Merchandise Inventory, July 1, 2017 89500 Prepaid Store Insurance 6300 Store Furniture and Fixtures 16000 Accumulated Depreciation - Store Furniture and Fixtures 500 Office Furniture and Fixtures 15000 Accumulated Depreciation - Office Furniture and Fixtures 900 Accounts Payable 54000 Notes Payable 180000 Unearned Commission 2400 Withholding Taxes Payable 490 SS & EC Premiums Payable 522 Phil Health Premiums Payable 100 Pag - Ibig Premiums Payable 200 Alfonso, Capital 521900 Alfonso, Personal 30000 Sales 583200 Sales Returns & Allowances 5020 Sales Discount 2880 Purchases 242000 Purchase Returns & Allowances 3000 Purchase Discount 2000 Freight In 6000 Advertising Expense 9000 Sales Salaries Expense 60000 Office Salaries Expense 33400 Rent Expense 96800 Taxes Expense 12000 Utilities Expense 42400 Interest Expense 600 Interest Income 3000 SS & EC Premiums Expense 6424 Phil Health Premiums Expense 1200 Pag - Ibig Premiums Expense 2400 Additional data needed for adjustments: a) Increase the allowance for doubtful accounts to 5% of accounts receivable b) the notes received from the customers consists of: 30-day, 9% note for 4000 dated June 10, 2018 60-day 800 note dated June 5, 2018 c) the business has paid on January 1, 2017 insurance premium for a two - year policy effective on that date d) the store furniture & fixture are depreciated over a useful life of 5 years. of those on hand as of June 30, 6000 were acquired only on June 1, 2017. the office furniture & fixture are to be depreciated at a rate of 20% per anum. e) sales salaries of 550 has accrued as of June 30 f) on May 1, 2018, the business paid for the three-month advertising contract for 900. g) the notes payable represents a 60-day, 18% note dated June 10, 2018, for which no interest has yet been paid. h) the business received a commission of 4,200 but only one-third of this has been earned by the company. i) merchandise unsold, per physical count of June 30, 2018, amounted to three-fourth of the beginning inventory. j) accrue 3% percentage tax on net sales. last quarter of June 30 net sales amounted to 175,200. Required: Prepare an eight-column worksheet Prepare an income statement and a statement of financial position. Three-fourth of rent and utilities should be allocated to selling expenses.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The Bookkeeper of Kenneth's Toyland presented the following ledger accounts and their balances as of June 30, 2018, the end of the fiscal period:
| Account Titles | |
| Cash In Bank | 487288 |
| Cash On Hand | 75200 |
| 112000 | |
| Allowance for |
4000 |
| Notes Receivable | 4800 |
| Merchandise Inventory, July 1, 2017 | 89500 |
| Prepaid Store Insurance | 6300 |
| Store Furniture and Fixtures | 16000 |
| 500 | |
| Office Furniture and Fixtures | 15000 |
| Accumulated Depreciation - Office Furniture and Fixtures | 900 |
| Accounts Payable | 54000 |
| Notes Payable | 180000 |
| Unearned Commission | 2400 |
| Withholding Taxes Payable | 490 |
| SS & EC Premiums Payable | 522 |
| Phil Health Premiums Payable | 100 |
| Pag - Ibig Premiums Payable | 200 |
| Alfonso, Capital | 521900 |
| Alfonso, Personal | 30000 |
| Sales | 583200 |
| Sales Returns & Allowances | 5020 |
| Sales Discount | 2880 |
| Purchases | 242000 |
| Purchase Returns & Allowances | 3000 |
| Purchase Discount | 2000 |
| Freight In | 6000 |
| Advertising Expense | 9000 |
| Sales Salaries Expense | 60000 |
| Office Salaries Expense | 33400 |
| Rent Expense | 96800 |
| Taxes Expense | 12000 |
| Utilities Expense | 42400 |
| Interest Expense | 600 |
| Interest Income | 3000 |
| SS & EC Premiums Expense | 6424 |
| Phil Health Premiums Expense | 1200 |
| Pag - Ibig Premiums Expense | 2400 |
Additional data needed for adjustments:
a) Increase the allowance for doubtful accounts to 5% of accounts receivable
b) the notes received from the customers consists of:
30-day, 9% note for 4000 dated June 10, 2018
60-day 800 note dated June 5, 2018
c) the business has paid on January 1, 2017 insurance premium for a two - year policy effective on that date
d) the store furniture & fixture are depreciated over a useful life of 5 years. of those on hand as of June 30, 6000 were acquired only on June 1, 2017. the office furniture & fixture are to be depreciated at a rate of 20% per anum.
e) sales salaries of 550 has accrued as of June 30
f) on May 1, 2018, the business paid for the three-month advertising contract for 900.
g) the notes payable represents a 60-day, 18% note dated June 10, 2018, for which no interest has yet been paid.
h) the business received a commission of 4,200 but only one-third of this has been earned by the company.
i) merchandise unsold, per physical count of June 30, 2018, amounted to three-fourth of the beginning inventory.
j) accrue 3% percentage tax on net sales. last quarter of June 30 net sales amounted to 175,200.
Required:
- Prepare an eight-column worksheet
- Prepare an income statement and a
statement of financial position . Three-fourth of rent and utilities should be allocated to selling expenses. - Make the necessary closing entries
- Prepare a post-closing
trial balance - Prepare the reversing entries
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