Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 4.6EX
Income statement; net loss
The following revenue and expense account balances were taken from the ledger of Acorn Health Services Co. after the accounts had been adjusted on January 31, 2018, the end of the fiscal year:
$10,000 | |
Insurance Expense | 9,000 |
Miscellaneous Expense | 8,150 |
Rent Expense | 60,000 |
Service Revenue | $634,900 |
Supplies Expense | 4,100 |
Utilities Expense | 44,700 |
Wages Expense | 548,200 |
Prepare an income statement.
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Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $18,330 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable:
Aging Class (Numberof Days Past Due)
Receivables Balanceon December 31
Estimated Percent ofUncollectible Accounts
0-30 days
$293,000
1
%
31-60 days
110,000
8
61-90 days
35,000
20
91-120 days
13,000
55
More than 120 days
18,000
80
Total receivables
$469,000
Maxwell Inc. analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible:
% Considered
Age Group
Balance
Uncollectible
0-30 days past due
$100,000
1%
31-60 days past due
18,000
3%
61-120 days past due
20,000
6%
121-180 days past due
7,000
10%
Over 180 days past due
2,000
20%
$147,000
The company handles credit losses using the allowance method.The credit balance of the Allowance for Doubtful Accounts is $840 on December 31, before any adjustments.a. Determine the amount of the adjustment for estimated credit losses on December 31.$Answerb. Determine the financial statement effect of a write off of Porter Company’s account on the following May 12, in the amount of $480.Use negative signs with answers, when appropriate.If a transaction increases and decreases the same Balance Sheet category, enter the increase amount in the first row and the…
(c) What is the balance of accounts receivable on it December 31 balance sheet?
Estimating Uncollectible Accounts and Reporting Accounts ReceivableLaFond Company analyzes its accounts receivable at December 31, and arrives at the age categories below along with the percentages that are estimated as uncollectible.
Age Group
Accounts
Receivable
Estimated
Loss %
0-30 days past due
$ 180,000
1%
31-60 days past due
40,000
2
61-120 days past due
22,000
5
121-180
12,000
10
Over 180 days past due
8,000
25
Total accounts receivable
$ 262,000
Chapter 4 Solutions
Corporate Financial Accounting
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