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 3, Problem 3.6BPR
At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker jacobs, an attorney:
| Net income for August | $112,500 |
| Total assets at August 31 | 650,000 |
| Total liabilities at August 31 | 225,000 |
| Total stockholders’ equity at August 31 | 425,000 |
In preparing the financial statements, adjustments for the following data were overlooked:
- Unbilled fees earned at August 31, $31,900.
Depreciation of equipment for August, $7,500.- Accrued wages at August 31, $5,200.
- Supplies used during August, $3,000.
Instructions
1.
2. Determine the correct amount of net income for August and the total assets, liabilities, and stockholders’ equity at August 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The first adjustment is presented as an example.
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The following transactions were completed by Irvine Company during the current fiscal year ended December 31:
Required: 1. Record the January 1 credit balance of $25,685 in a T-account for Allowance for Doubtful Accounts.
2.A. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
B. Post each entry that affects the following selected T-accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.
3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).
4. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ¼ of 1% of the net sales of $17,710,000 for the year, determine the following:
A. Bad debt expense for the year.
B. Balance in the allowance account after the adjustment of…
Van Hise Company’s Accounts Receivable balance at December 31 was $600,000, and there was a debit balance of $3,600 in the Allowance for Doubtful Accounts. Van Hise estimates that 3% of the Accounts Receivable will prove to be uncollectible.
After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year-end?
Select one:
A. $540,000
B. $527,400
C. $582,000
D. $520,200
At December 31, before adjusting and closing the accounts had occurred, the Allowance for Doubtful Accounts of Seaboard Corporation showed a debit balance of $3,200. An aging of the accounts receivable indicated the amount probably uncollectible to be $2,100. Under these circumstances, a year-end adjusting entry for uncollectible accounts expense would include a:
A.
Debit to Uncollectible Accounts Expense of $5,300.
B.
Debit to the Allowance for Doubtful Accounts for $1,100.
C.
Debit to Uncollectible Accounts Expense of $2,100.
D.
Credit to the Allowance for Doubtful Accounts for $1,100.
Chapter 3 Solutions
Corporate Financial Accounting
Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (A) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - (A) Explain the purpose of the two accounts:...
Ch. 3 - Account requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for accrued expense Prospect Realty Co....Ch. 3 - Adjustment for unearned revenue On June 1, 2018,...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Effect of omitting adjustments For the year ending...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Classifying types of adjustments Classify the...Ch. 3 - Classifying adjusting entries The following...Ch. 3 - Adjusting entry for accrued fees At the end of the...Ch. 3 - Effect on omitting adjusting entry The adjusting...Ch. 3 - Prob. 3.5EXCh. 3 - Prob. 3.6EXCh. 3 - Effect of omitting adjusting entry Accrued...Ch. 3 - Prob. 3.8EXCh. 3 - Adjusting entries for unearned fees The balance in...Ch. 3 - Prob. 3.10EXCh. 3 - Adjusting entry for supplies The balance in the...Ch. 3 - Determining supplies purchased The supplies and...Ch. 3 - Effect of omitting adjusting entry At March 31,...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for unearned and accrued fees...Ch. 3 - Prob. 3.17EXCh. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Determining fixed assets book value The balance in...Ch. 3 - Prob. 3.20EXCh. 3 - Effect s of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Prob. 3.25EXCh. 3 - Adjusting entries from trial balances The...Ch. 3 - Prob. 3.27EXCh. 3 - Adjusting entries On March 31, the following data...Ch. 3 - Prob. 3.2APRCh. 3 - Adjusting entries Reliable Repairs Service, an...Ch. 3 - Adjusting entries Good Note Company specializes in...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Adjusting entries On May 31, the following data...Ch. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Crazy Mountain Outfitters Co.,...Ch. 3 - Adjusting entries The Signage Company specializes...Ch. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of August,...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Prob. 3.1ADMCh. 3 - Chipotle: Vertical analysis Chipotle Mexican...Ch. 3 - Prob. 3.3ADMCh. 3 - Prob. 3.4ADMCh. 3 - Prob. 3.1TIFCh. 3 - Prob. 3.3TIF
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