INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 2, Problem 2.9E
• LO2–5
Prepare the necessary adjusting entries at December 31, 2018, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded.
1. On October 1, 2018, Microchip lent $90,000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2019.
2. On November 1, 2018, the company paid its landlord $6,000 representing rent for the months of November through January. Prepaid rent was debited.
3. On August 1, 2018, collected $12,000 in advance rent from another company that is renting a portion of Microchip’s factory. The $12,000 represents one year’s rent and the entire amount was credited to rent revenue.
4.
5. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $8,000. The company records vacation pay as salaries expense.
6. Microchip began the year with $2,000 in its asset account, supplies. During the year, $6,500 in supplies were purchased and debited to supplies. At year-end, supplies costing $3,250 remain on hand.
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Exercise 5-11 (Algo) Bad debts analysis—Allowance account LO 5
On January 1, 2019, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,090. During the first 11 months of the year, bad debts expense of $21,062 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2019, was $9,927.
Required:
a. What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.)
b. As the result of a comprehensive analysis, it is determined that the December 31, 2019, balance of the Allowance for Bad Debts account should be $9,341. Show the adjustment required in the journal entry format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
c. During a conversation with the credit manager, one of Tabor's sales representatives learns that a $1,272 receivable from a bankrupt customer has not been written off but was…
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Current Attempt in Progress
At the end of 2020, Crown Point Corp. has accounts receivable of $479,200 and an allowance for doubtful accounts of $30,300. On
January 24, 2021, Crown Point learns that its $11,600 receivable from Hutley Inc. is not collectible. Management authorizes a write
off. But on March 4, 2021, Crown Point Corp. receives payment in full of $11,600 from Hutley Inc. after the write off.
Prepare the required journal entries to record this transaction. (List all debit entries before credit entries. Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter O for the amounts.)
Date Account Titles and Explanation
Debit
Credit
Mar. 4
(To reverse write off of account receivable)
Mar. 4
(To record collection of account receivable)
eTextbook and Media
List of Accounts
II
Brief Exercise 8-03 a-b
At the end of 2021, Larkspur Co. has accounts receivable of $675,100 and an allowance for doubtful accounts of $24,370. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,127.(a)Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Enter an account title
Enter a debit amount
Enter a credit amount
Enter an account title
Enter a debit amount
Enter a credit amount
(b)What is the cash realizable value of the accounts receivable before the write-off and after the write-off?
Before Write-Off
After Write-Off
Cash realizable value
$Enter a dollar amount
$Enter a dollar amount
Chapter 2 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
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