Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 4, Problem 4.12E
- Cash: $3,230,000
- Accounts Receivable: $1 240 000
- Prepaid Insurance: $252,000
- Prepaid Rent: $480,000
- Buildings: $3,540,300
Accumulated Depreciation —Buildings: $360,000- Accounts Payable: $980,000
- Wages Payable: $420,000
- Note Payable: $360,000
- Common Stock: $1,000,000
- Sales Revenue: $7,460,300
- Wage Expense: $1,120,000
- Utilities Expense: $94,000
- Insurance Expense: $120,000
- Interest Expense: $234,000
- Rent Expense: $260,000
- Depreciation Expense—Buildings: $0
At year-end, Fanatical Fashions makes necessary adjusting journal entries to properly record revenues and expenses for the year. The following information applies to the adjusting journal entries:
- The prepaid insurance balance relates to a two-year insurance policy purchased in June that covers the period of July 1, 2018 to June 30. 2020.
- The prepaid rent balance relates to rent that was paid in January to cover the company’s facilities for the current year
- Wages for the year in the amount of $236,000 will be paid after year end and have not yet been recorded
- Fanatical purchased the buildings in the beginning of the year and
depreciates on a yearly basis. It must record a lull year of depreciation at the end of 2018. The buildings have no residual value a 30 year estimated useful life and will be depreciated on a straight-line basis. - Fanatical has not yet recorded interest expense for 2018 on the note payable in the amount of $16,000.
Prepare the journal entries necessary to record the adjustments at year end Omit explanations.
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Students have asked these similar questions
Question: Perform the following accounting for the receivables of A & G, an accounting firm, at December 31, 2014.
1. Start with the beginning balances for these T-accounts:
Accounts Receivable, $80,000
Allowance for Uncollectible Accounts, $9,000
Post the following 2014 transactions to the T-accounts:
a. Service revenue of $850,000, all on account
b. Collections on account, $790,000
c. Write-offs of uncollectible accounts, $7,000
d. Bad debt expense (allowance method), $8,000
2. What are the ending balances of Accounts Receivable and Allowance for Uncollectible Accounts?
3. Show two ways A & G could report accounts receivable on its balance sheet at December 31, 2014.
Please explain & show steps, thank you.
During August 2024, Yond Company recorded the following:
• Sales of $51,100 ($44,000 on account; $7,100 for cash). Ignore Cost of Goods Sold.
• Collections on account, $33,800.
• Write-offs of uncollectible receivables, $1,900.
• Recovery of receivable previously written off, $200.
Date
Aug.
Accounts and Explanation
Debit
Credit
Requirements
Journalize Yond's transactions during August 2024, assuming Yond uses the direct
write-off method.
1.
2.
Journalize Yond's transactions during August 2024, assuming Yond uses the allowance
method.
Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet.
At September 30, 2018, the accounts of Roxbury Medical Center (RMC) include the following:
Accounts Receivable
$154,000
Allowance for Bad Debts (credit balance)
3,700
During the last quarter of 2018, RMC completed the following selected transactions:
• Sales on account, $465,000. Ignore Cost of Goods Sold.
• Collections on account, $441,800.
• Wrote off accounts receivable as uncollectible: Jenkins, Co., $1,900; Sony, $800; and Smith, Inc., $500
• Recorded bad debts expense based on the aging of accounts receivable, as follows:
Age of Accounts
1–30 Days
31–60 Days
61–90 Days
Over 90 Days
Accounts Receivable
$ 97,000
$ 37,000
$ 17,000
$ 14,000
Estimated percent uncollectible
0.2%
3.5%
29%
32%
Requirements
Open T-accounts for Accounts Receivable and Allowance for…
Chapter 4 Solutions
Intermediate Accounting (2nd Edition)
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