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Concept explainers
Task
The following are some of the accounts and their balances recorded in the Java Corp.
|
Debit |
Credit |
Equipment |
$ 600,000 |
|
Prepaid Advertising |
180,000 |
|
Salaries Expense |
142,000 |
|
Interest Expense |
8,200 |
|
|
|
$ 200,000 |
Notes Payable |
|
220,000 |
Concert Ticket Revenue |
|
1,180,000 |
a) Based on the following adjustment data, please make the necessary
- The estimated economic life of the equipment is 10 years, has a residual value of $ 100,000 and is
depreciated using theStraight Line method . - Notes payable with a maturity of 180 days with a bearing interest of 8% were issued to obtain a cash loan from the bank on October 18, 2019.
- In December, the company sold 20,000 concert tickets at a price of $ 18 per ticket, for the concert to be held by PT Tok Tok in March 2019, initially recorded as revenue.
- Prepaid advertising is an advertising contract for 2 newspapers. Advertisements in newspaper X are published 2 times per month, in newspaper Y once per month.
Contract |
Date |
total |
Many Publications |
newspaper X |
1/11/2019 |
$ 240,000 |
24 times |
newspaper Y |
1/10/2019 |
$ 144,000 |
12 times |
5. The unpaid employee wages by the end of 2019 are $ 37,500.
b) What is the balance value for each account below which is recorded in the Income Statement for 2019?
-
- Interest Expense
- Concert Ticket Revenue
- Prepaid Advertising
- Salaries Expense
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- At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $752. During the year, previously written off accounts of $141 are reinstated and accounts totaling $710 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be a.$183 b.$710 c.$141 d.$752arrow_forwardWhispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $54,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Whispering's incremental borrowing rate is 8%. Whispering is unaware of the rate being used by the lessor. At the end of the lease, Whispering has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Whispering uses the straight-line method of depreciation on similar owned equipment. Click here to view factor tables.arrow_forwardPhysicians’ Hospital has the following balances on December 31, 2024, before any adjustment: Accounts Receivable = $50,000; Allowance for Uncollectible Accounts = $1,000 (credit). On December 31, 2024, Physicians’ estimates uncollectible accounts to be 20% of accounts receivable. Required: 1. Record the adjusting entry for uncollectible accounts on December 31, 2024.2. Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.3. Calculate net accounts receivable reported in the balance sheet.arrow_forward
- Spring Garden Flowers had the following balances at December 31, 2024, before the year-end adjustments: E (Click the icon to view the balances.) The aging of accounts receivable yields the following data: E (Click the icon to view the accounts receivable aging schedule.) Requirements Journalize Spring's entry to record bad debts expense for 2024 using the aging-of-receivables method. 1. 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Requirement 1. Journalize Spring's entry to record bad debts expense for 2024 using the aging-of-receivables method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts Debit Credit Dec. 31 Data Table Accounts Receivable Allowance for Bad Debts 66,000 1,615 Requirement 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Allowance for Bad Debts Print Done Data Table Age of Accounts Receivable 0-60 Days Over 60 Days Total…arrow_forwardDogarrow_forwardThe Garware Company uses allowance method to recognize uncollectible accounts expense. It provides you the following selected information Accounts receivable on December 31 2020 RO 280000 Required balance in Allowance for Doubtful Accounts account on December 31 2020 RO 4000 Existing balance in Allowance for Doubtful Accounts account on December 31 2019 RO 3500 The journal entry to recognize uncollectible accounts expense on December 31 2017 is a. Dr Uncollectible Accounts Expense 4000 and Cr Allowance for Doubtful Accounts 4000 b. Dr Uncollectible Accounts Expense 500 and Cr Allowance for Doubtful Accounts 500 c. Dr Accounts Receivable 3500 Cr Allowance for Uncollectible Accounts Expense 3500 d. Dr Accounts Receivable 3500 Cr Uncollectible Accounts Expense 3500arrow_forward
- Prepare the journal entries, with appropriate journal entry descriptions, for 2020, including any required year-end adjusting entries.The company prepares annual adjusting entries.arrow_forwardRequired: (a) Prepare journal entries to record the impairment loss of receivable in 2021 under Statement of Financial Position approach. (b) Prepare partial Statement of Financial Positions to show the accounts receivables at 31 December 2021.arrow_forwardThank you!arrow_forward
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