Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Question
Chapter 2, Problem 2.14E
To determine
Closing Entries:
Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the period, to transfer the final balance.
To Prepare: The necessary closing entries at December 31, 2018.
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Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on
December 31):
Sales revenue
Cost of goods sold
Administrative expense
Selling expense
Interest revenue
Interest expense
Loss on sale of assets of discontinued component
2024
2023
$5,250,000 $4,350,000
2,170,000
3,030,000
970,000
845,000
530,000
472,000
167,000
157,000
234,000
Sales revenue
Cost of goods sold
Administrative expense
Selling expense
Operating income before taxes
On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP.
The assets of the component were sold on September 30, 2024, for $116,000 less than their book value. Results of operations for the
component (included in the above account balances) were as follows:
234,000
116,000
1/1/2024-9/30/2024
$ 570,000
(375,000)
(67,000)
(37,000)
$ 91,000
2023
$ 670,000
(422,000)
(57,000)
(37,000)
$ 154,000
In addition to the…
Question 7 of 8
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-/ 30
Oak Ridge Corporation has accounts receivable of $95,500 at March 31, 2022. An analysis of the accounts shows these amounts.
Balance, March 31
Month of Sale
2022
2021
March (current)
$66,300
$76,200
February (1 - 30 days past due)
12,000
8,800
December and January (31 - 90 days past due)
9,300
2,700
(over 90 days past due)
7,900
1,200
$95,500
$88,900
Credit terms are n/30. At March 31, 2022, there is an unadjusted $2,200 credit balance in Allowance for Doubtful Accounts. The
company uses the percentage of receivables by age category for estimating uncollectible accounts Oak Ridge's estimates of bad debts
are as shown below.
Estimated Percentage
Age of Accounts
Uncollectible
Current
2%
1-30 days past due
5%
31-90 days past due
30%
Over 90 days past due
50%
Prepare an aging schedule to determine the total estimated uncollectibles accounts at March 31, 2022.
III
Required information
Exercise 7-21B Complete the accounting cycle using long-term asset transactions (LO7-4, 7-7)
[The following information applies to the questions displayed below.]
On January 1, Year 1, the general ledger of a company includes the following account balances:
Accounts
Debit
Credit
Cash
$ 59,200
Accounts Receivable
26,000
Allowance for Uncollectible Accounts
$
2,700
Inventory
Notes Receivable (5%, due in 2 years)
36,800
18,000
Land
160,000
Accounts Payable
15,300
Common Stock
225,000
57,000
$ 300,000
Retained Earnings
Totals
$ 300,000
During January Year 1, the following transactions occur:
January 1 Purchase equipment for $20,000. The company
estimates a residual value of $2,000 and a four-year
service life.
4 Pay cash on accounts payable, $10,000.
8 Purchase additional inventory on account, $87,900.
January
January
January 15 Receive cash on accounts receivable, $22,500.
January 19 Pay cash for salaries, $30,300.
January 28 Pay cash for January utilities, $17,000.…
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
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