Financial Accounting
3rd Edition
ISBN: 9780078025549
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 3, Problem 3.8BE
(1).
To determine
To record: The
(2).
To determine
To record: The adjusting entry for insurance expense on December 31, 2018.
(3).
To determine
To calculate: The value of year-end adjusted balances of prepaid insurance and insurance expense.
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Logan Township acquired its water system from a private company onJune 1. No receivables were acquired with the purchase. Therefore, totalaccounts receivable on June 1 had a zero balance.Logan plans to bill customers during the month of sale, and 70% of theresulting billings will be collected during the same month. 90% of theremaining balance should be collectable in the next following month.The remaining uncollectible amounts will relate to citizens who havemoved away. Such amounts are never expected to be collected and willbe written off.Water sales during June are estimated at $3,000,000 and remain thesame in July and August.Estimate the monthly cash collections for August. An example for Juneand July follows:June July August$3,000,000 X .7 =$2,100,000 (Junereceivables collected inJune). This leaves$900,000 yet to becollected.$3,000,000 X .7 =$2,100,000 (Julybillings collected inJuly). In addition, 90%of June’s uncollectedreceivables will becollected: $900,000 X.9 =…
Logan Township acquired its water system from a private company onJune 1. No receivables were acquired with the purchase. Therefore, totalaccounts receivable on June 1 had a zero balance.Logan plans to bill customers in the month following the month of sale,and 70% of the resulting billings will be collected during the billingmonth. 90% of the remaining balance should be collectible in the nextfollowing month. The remaining uncollectible amounts will relate tocitizens who have moved away. Such amounts are never expected to becollected and will be written off.Water sales during June are estimated at $4,000,000 and expected toincrease by 30% in July. August sales will be the same as July sales.What the Estimate the monthly cash collections for June, July, August, andSeptember.
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Required:
1.
Prepare the related journal entries for April 1, May 1, and June 1.
2.
Then compute the monthly property tax expense that Cee & Co. would record during July through March.
Chapter 3 Solutions
Financial Accounting
Ch. 3 - Prob. 1RQCh. 3 - 2.Discuss the major principle that describes...Ch. 3 - 3.Samantha is a first-year accounting student. She...Ch. 3 - 4.Describe when revenues and expenses are...Ch. 3 - Rip Side of Question 7 5.Executive Lawn provides...Ch. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Consider the information in Question 7. Using...Ch. 3 - Prob. 9RQCh. 3 - There are two basic types of adjusting...
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