FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter 3, Problem 16QS
To determine
Prepaid Insurance:
Prepaid insurance is the amount of insurance premium paid in advance. It is an asset for the business and appears in the balance sheet.
To identify: Effects of omission of
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Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?
a.debit Allowance for Doubtful Accounts, $29,600; credit Bad Debt Expense, $29,600
b.debit Allowance for Doubtful Accounts, $34,200; credit Bad Debt Expense, $34,200
c.debit Bad Debt Expense, $29,600; credit Allowance for Doubtful Accounts, $29,600
d.debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200
Question
Part A
Albert Trading Limited used the statement of financial position approach to estimate the
impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed
that S68,000 of the S835,000 outstanding accounts receivable will prove uncollectible. The
Allowance for Impairment has a debit balance of $6,200 prior to adjustment.
Required:
(Explanation of the Journal Entry is not required)
Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable.
Part B
On 12 January 2020, Peter Lee, a major customer, declared bankruptey, and Albert Trading,
determined that a receivable from Peter Lee in the amount of $3,400 was worthless.
Required:
(Explanation of the Journal Entry is not required)
Prepare the joumal entry required by Albert Trading in this situation.
Part A
Albert Trading Limited used the statement of financial position approach to estimate the
impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed
that S68,000 of the $835,000 outstanding accounts receivable will prove uncollectible. The
Allowance for Impairment has a debit balance of $6,200 prior to adjustment.
Required:
(Explanation of the Journal Entry is not required)
Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable.
Part B
On 12 January 2020, Peter Lee, a major customer, declared bankruptey, and Albert Trading,
determined that a receivable from Peter Lee in the amount of $3,400 was worthless.
Required:
(Explanation of the Journal Entry is not required)
Prepare the journal entry required by Albert Trading in this situation.
Chapter 3 Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
Ch. 3 - A company forgot to record accrued and unpaid...Ch. 3 - Prior to recording adjusting entries, the Supplies...Ch. 3 - Prob. 3MCQCh. 3 - On November 1, Stockton Co. receives $3,600 cash...Ch. 3 - Prob. 5MCQCh. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQ
Ch. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 1QSCh. 3 - Prob. 2QSCh. 3 - Prob. 3QSCh. 3 - Prob. 4QSCh. 3 - Prob. 5QSCh. 3 - Prob. 6QSCh. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Prob. 15QSCh. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Prob. 19QSCh. 3 - Prob. 20QSCh. 3 - Prob. 21QSCh. 3 - Prob. 22QSCh. 3 - Preparing a classified balance sheet C3 Use the...Ch. 3 - Prob. 24QSCh. 3 - Prob. 25QSCh. 3 - Prob. 26QSCh. 3 - Prob. 27QSCh. 3 - Prob. 28QSCh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Preparing unadjusted and adjusted trial balances,...Ch. 3 - Prob. 17ECh. 3 - Prob. 1PSACh. 3 - Prob. 2PSACh. 3 - Prob. 6PSACh. 3 - Prob. 7PSACh. 3 - Prob. 1PSBCh. 3 - Prob. 2PSBCh. 3 - Prob. 3PSBCh. 3 - Preparing financial statements from adjusted trial...Ch. 3 - Prob. 5PSBCh. 3 - Preparing closing entries and financial statements...Ch. 3 - Determining balance sheet classifications C3 In...Ch. 3 - After the success of the company’s first two...Ch. 3 - Prob. 1GLPCh. 3 - Prob. 2GLPCh. 3 - Prob. 3GLPCh. 3 - Prob. 4GLPCh. 3 - Prob. 5GLPCh. 3 - Prob. 1AACh. 3 - Prob. 2AACh. 3 - Prob. 3AACh. 3 - Prob. 1BTNCh. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Prob. 5BTNCh. 3 - Prob. 6BTN
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- Part A Albert Trading Limited used the statement of financial position approach to estimate the impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed that $68,000 of the $835,000 outstanding accounts receivable will prove uncollectible. The Allowance for Impairment has a debit balance of $6,200 prior to adjustment. Required: (Explanation of the Journal Entry is not required) Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable. Part B On 12 January 2020, Peter Lee, a major customer, declared bankruptcy, and Albert Trading, determined that a receivable from Peter Lee in the amount of S3,400 was worthless. Required: (Explanation of the Journal Entry is not required) Prepare the journal entry required by Albert Trading in this situation.arrow_forwardPart A Albert Trading Limited used the statement of financial position approach to estimate the impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed that $68,000 of the $835,000 outstanding accounts receivable will prove uncollectible. The Allowance for Impairment has a debit balance of $6,200 prior to adjustment. Required: (Explanation of the Journal Entry is not required) Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable.arrow_forwardPROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2020 50 under 2019 40 under 12 under 68 under 25 under 2018 Accounts Payable Depreciation Expense Merchandise Inventory 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 56 under Unearned Income 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers Accounts Receivable Accrued Expense Prepaid Expense 82 over 71 under 68 under 85 under 92 over 78 under 27 under 17 over 19 over 18 under 12 under Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilitiesarrow_forward
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- Question Content Area Allowance for Doubtful Accounts has a credit balance of $1,065 at the end of the year (before adjustment), and an analysis of the receivables indicates uncollectible accounts of $11,265. Which of the following entries journalizes the proper adjustment for bad debt expense? a. debit Bad Debt Expense for $12,330; credit Allowance for Doubtful Accounts for $12,330 b. debit Bad Debt Expense for $10,200; credit Allowance for Doubtful Accounts for $10,200 c. debit Allowance for Doubtful Accounts for $12,330; credit Bad Debt Expense for $12,330 d. debit Allowance for Doubtful Accounts for $10,200; credit Bad Debt Expense for $10,200arrow_forwardYou discovered the following errors in connection with your examination of the Chapter 6 - Correction of Errors PROBLEM 6-2 Counterbalancing Errors You discovered the following errors in connection with your examination of the financial statements of Jane Corporation: Accrued rent expense of P10,000 was not recorded at the end of 2020. 2) Accrued interest receivable of P15.000 was not recorded at the end of 2020. 3) 1) S) The company paid one-year insurance premium of P24,000 effective April 1 2020. The entire amount was debited to expense account and no adjustment was made at the end of 2020. 4) The company leased a portion of its building for P48,000. The term of the lease is one year ending April 30, 2021. Collection of rent was credited to rent revenue account. At the end of 2020, no entry was made to take up the unearned portion of the amount collected. The following data were extracted from the financial statements of Jane Corporation: 2020 2021 100,000 300,000 100,000 Net income…arrow_forwardAnalysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $440,000, Allowance for Doubtful Accounts has a debit balance of $4,000, and sales for the year total $1,980,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $18,400. a. Determine the amount of the adjusting entry for uncollectible accounts.$fill in the blank 1 b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $fill in the blank 2 Allowance for Doubtful Accounts $fill in the blank 3 Bad Debt Expense $fill in the blank 4 c. Determine the net realizable value of accounts receivable.$fill in the blank 5 Answer with all workarrow_forward
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