FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260664386
Author: PHILLIPS, LIBB
Publisher: MCG
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Chapter 4, Problem 16E
Recording Four
Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations ending December 31.
| Account Titles | Debit | Credit |
| Cash | $ 38 | |
| 9 | ||
| Prepaid Insurance | 6 | |
| Equipment | 80 | |
| $ 0 | ||
| Accounts Payable | 9 | |
| Common Stock | 76 | |
| 4 | ||
| Sales Revenue | 80 | |
| Insurance Expense | 0 | |
| Salaries and Wages Expense | 10 | |
| Supplies Expense | 26 | |
| Totals | $169 | $169 |
Other data not yet recorded at December 31:
- a. Insurance expired during the year, $5.
- b. Depreciation expense for the year, $4.
- c. Salaries and wages payable, $7.
- d. Income tax expense, $9.
Required:
- 1. Prepare the adjusting journal entries for the year ended December 31.
- 2. Using T-accounts, determine the adjusted balances in each account and prepare an adjusted trial balance as of December 31.
- 3. By what amount would net income have been understated or overstated had the adjusting journal entries not been recorded?
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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
As Perry Materials Supply was preparing for the year-end close, their balances were as follows:
Accounts Receivable - $146000 (dr)
Allowance for uncollectible accounts - $6200 (dr)
Uncollected Account Expense - $0
Perry Materials uses the aging method and has completed the following analysis of the accounts receivable:
Customer
1-30 Days
31-60 Days 61-90 Days
Over 90 Days
Total
Balance
Johnson
$4,600
$3,200
$7,800
Hot Pots, Inc.
800
1,000
1,800
Potter
40,000
550
40,550
Harrison
3,600
900
4,500
Marx
2,000
50
2,050
Younger
65,000
65,000
Merry Maids
5,900
5,900
Acher
12,000
6,400
18,400
Totals
$127,500
$13,750
$3,700
$1,050
$146,000
Uncollectible percentage
2%
10%
20%
40%
Estimated uncollectible amount
$2,550
$1,375
$740
$420
$5,085
Required:
How much will the…
Current Attempt in Progress
The ledger of Cullumber Company at the end of the current year shows Accounts Receivable $68,000, Credit Sales $810,000, and
Sales Returns and Allowances $38,000. Prepare journal entries for each separate scenario below.
If Cullumber Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting
entry at December 31, assuming Cullumber Company determines that Matisse's $500 balance is uncollectible.
(a)
If Allowance for Doubtful Accounts has a credit balance of $900 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 8% of accounts receivable.
(b)
If Allowance for Doubtful Accounts has a debit balance of $490 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 7% of accounts receivable.
(c)
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles…
Chapter 4 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING
Ch. 4 - Prob. 1QCh. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain the differences between depreciation...Ch. 4 - What is an adjusted trial balance? What is its...Ch. 4 - On December 31, a company makes a 59,000 payment...Ch. 4 - Using the information in question 8, determine the...Ch. 4 - Using the information in question 8, prepare the...
Ch. 4 - What is the equation for each of the following...Ch. 4 - Prob. 12QCh. 4 - What is the purpose of closing journal entries?Ch. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - What is a post-closing trial balance? Is it a...Ch. 4 - The owner of a local business complains that the...Ch. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - When a concert promotions company collects cash...Ch. 4 - On December 31, an adjustments made to reduce...Ch. 4 - An adjusting journal entry to recognize accrued...Ch. 4 - Prob. 6MCCh. 4 - Company A has owned a building for several years....Ch. 4 - Which of the following trial balances is used as a...Ch. 4 - Assume the balance in Prepaid Insurance is 2,500...Ch. 4 - Assume a company receives a bill for 10,000 for...Ch. 4 - Prob. 1MECh. 4 - Understanding Concepts Related to Adjustments...Ch. 4 - Matching Transactions with Type of Adjustment...Ch. 4 - Recording Adjusting Journal Entries Using the...Ch. 4 - Determine Accounting Equation Effects of Deferral...Ch. 4 - Prob. 6MECh. 4 - Determining Accounting Equation Effects of Accrual...Ch. 4 - Recording Adjusting Journal Entries Using be...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral and Accrual...Ch. 4 - Reporting Adjusted Account Balances Indicate...Ch. 4 - Preparing an Adjusted Trial Balance Macro Company...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Reporting a Statement of Retained Earnings Refer...Ch. 4 - Prob. 16MECh. 4 - Recording Closing Journal Entries Refer to the...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Prob. 20MECh. 4 - Prob. 21MECh. 4 - Prob. 22MECh. 4 - Prob. 23MECh. 4 - Prob. 24MECh. 4 - Prob. 25MECh. 4 - Prob. 26MECh. 4 - Prob. 1ECh. 4 - Identifying Adjustments and Preparing Financial...Ch. 4 - Prob. 3ECh. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Recording Adjusting Journal Entries Refer to E4-6....Ch. 4 - Recording Typical Adjusting Journal Entries...Ch. 4 - Determining Accounting Equation Effects of Typical...Ch. 4 - Determining Adjusted Income Statement Account...Ch. 4 - Reporting Depreciation The adjusted trial balance...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Analyzing the Effects of Adjusting Journal Entries...Ch. 4 - Reporting an Adjusted Income Statement Dyer, Inc.,...Ch. 4 - Recording Adjusting Entries and Preparing an...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Prob. 18ECh. 4 - Analyzing, Recording, and Summarizing Business...Ch. 4 - Preparing Adjusting Entries, an Adjusted Trial...Ch. 4 - Preparing an Adjusted Trial Balance, Closing...Ch. 4 - Analyzing and Recording Adjusting Journal Entries...Ch. 4 - Prob. 3CPCh. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Analyzing and Recording Adjusting Journal Entries...Ch. 4 - Prob. 3PACh. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Recording Adjusting Journal Entries Cactus...Ch. 4 - Determining Accounting Equation Effects of...Ch. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 2COPCh. 4 - Recording Transactions (Including Adjusting...Ch. 4 - From Recording Transactions (Including Adjusting...Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 6COPCh. 4 - Finding Financial Information Refer to the...Ch. 4 - Prob. 2SDCCh. 4 - Ethical Decision Making: A Mini-Case Assume you...Ch. 4 - Adjusting the Accounting Records Assume it is now...
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