Prepare journal entries for the following transactions: Wrote-off ABC Company account balance of $12,000 Received payment of $4,000 from XYZ Company and wrote-off the remaining balance of $2,000 Sold merchandise to DEF Company for $20,000, 2/10, n/30. The cost of the merchandise was $16,000 Collected $5,000 of the $12,000 previously owed from ABC Company Received payment for one-half of amount owed from DEF Company within the discount period Received the remaining amount owed by XYZ Company of $2,000 Wrote off the balance of the DEF Company account as uncollectible
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Part A:
Prepare
- Wrote-off ABC Company account balance of $12,000
- Received payment of $4,000 from XYZ Company and wrote-off the remaining balance of $2,000
- Sold merchandise to DEF Company for $20,000, 2/10, n/30. The cost of the merchandise was $16,000
- Collected $5,000 of the $12,000 previously owed from ABC Company
- Received payment for one-half of amount owed from DEF Company within the discount period
- Received the remaining amount owed by XYZ Company of $2,000
- Wrote off the balance of the DEF Company account as uncollectible
Part B:
Record the
- The allowance account before adjustment has a credit balance of $3,000. Bad debt expense is estimated at 2% of net sales.
- The allowance account before adjustment has a credit balance of $3,000. An aging analysis of A/R indicates uncollectible accounts of $7,500.
- The allowance account before adjustment has a debit balance of $4,000. Bad debt expense is estimated at 3% of net sales.
- The allowance account before adjustment has a debit balance of $4,000. An aging analysis of A/R indicates uncollectible accounts of $7,500.
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