FINANCIAL ACCOUNTING- LL W CONNECT PKG
FINANCIAL ACCOUNTING- LL W CONNECT PKG
5th Edition
ISBN: 9781260844405
Author: SPICELAND
Publisher: MCG
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Chapter 5, Problem 3PB

1.

To determine

Prepare the transactions of engineering M for each date.

1.

Expert Solution
Check Mark

Explanation of Solution

DateAccount Title and ExplanationDebit ($)Credit ($)
February 2,2021Accounts receivable38,000
Service revenue38,000
( To record the service  provided on account)
July 23,2021Cash27,000
Accounts receivable27,000
( To record the receipt of cash on account)
December 31, 2021Bad debt expense (1)2,750
Allowance for uncollectible accounts2,750
( To record the estimation of future bad debts)
April 12, 2022Accounts receivable51,000
Service Revenue51,000
( To record the services provided on account)
June 28, 2022Cash6,000
Accounts receivable6,000
( To record receipt of cash on account)
September 13, 2022Allowance for uncollectible accounts5,000
Accounts receivable5,000
( To record the writing-off of actual bad debts)
October 5, 2022Cash (4)45,000
Accounts receivable45,000
( To record the  receipt of cash from customer on account)
December 31, 2022Bad debt expense (3)3,750
Allowance for uncollectible accounts3,750
( To record the estimation of future bad debts)

Table (1)

Working notes:

Calculate Estimate future bad debts On December 31, 2021:

Estimate future bad debts=[Accounts receivable×estimate percentage of uncollectible account]=$11000(2)×25%=$2,750

(1)

Accounts receivable=[Providing services on account on February 2, 2021Received cash from customers on account on July 23, 2021]=$38,000$27,000=$11,000

(2)

Calculate Estimate future bad debts On December 31, 2022:

Estimate future bad debts=[Accounts receivable×Estimated Percentage of uncollectible accounts+balance in allowance for uncollectible account after written off]=$6,000(3)×25%+$2,250(5)=$3,750

(3)

Calculate the value of accounts receivable:

Accounts receivable=[Providing services on account on April 12, 2022Received cash from customers on account on June 28, 2022]=$51,000$6,000=$45,000

(4)

Calculate the balance in allowance for uncollectible accounts after written off:

[Balance in allowance for uncollectible accounts after write off]=[Allowance for uncollectible accounts on December 31,2021Write-off actual bad debts on September 13, 2022]=$2,750$5,000=($2,250)

(5)

2.

To determine

Post transactions to the following accounts: Cash, Accounts receivable, and Allowance for uncollectible accounts.

2.

Expert Solution
Check Mark

Explanation of Solution

Accounts receivable:

Accounts receivable is an asset of the firm, which refers to the amount which the company would receive in near future for the goods or services provided; hence it is shown in the balance sheet.

For 2021:

Cash account
DateParticularsDebitDateParticularsCredit
July 23,2021Accounts receivable$27,000
December 31, 2021Balance (Balancing figure)$27000

Table (2)

For 2022:

Cash account
DateParticularsDebitDateParticularsCredit
January 1, 2022Beginning balance$27,000
June 28, 2022Accounts receivable$6,000
October 5, 2022Accounts receivable$45,000
December 31, 2022Balance (balancing figure)$78,000

Table (3)

For 2021:

Accounts receivable account
DateParticularsDebitDateParticularsCredit
February 2, 2021Service revenue$38,000July 23,2021Cash$27000
December 31, 2021Balance (Balancing figure)$11,000

Table (4)

For 2022:

Accounts receivable account
DateParticularsDebitDateParticularsCredit
April 12, 2022Service revenue$51,000June 28, 2022Cash$6,000
September 13, 2022Allowance for uncollectible accounts$5,000
October 5, 2022Cash45,000
December 31, 2022Balance (balancing figure)$6,000

Table (5)

For 2021:

Allowance for uncollectible account
DateParticularsDebitDateParticularsCredit
December 31, 2021Bad debt expense$2,750

Table (6)

For 2022:

Allowance for uncollectible account
DateParticularsDebitDateParticularsCredit
September 13, 2022Accounts receivable$5,000December 31, 2022Bad debt expense$3,750
December 31, 2022Balance (balancing figure)$1,500

Table (7)

3.

To determine

Calculate the net realizable value of accounts receivable at the end of 2021 and 2022.

3.

Expert Solution
Check Mark

Explanation of Solution

Calculate the net realizable value of accounts receivable at the end of 2021 and 2022:

Years20212022
Total accounts receivable$11,000$6,000
Less: Allowance for uncollectible accounts($2,750)($1,500)
Net realizable value$8,250$4,500

Table (8)

Conclusion

Hence, the net realizable value of Engineering M for the year 2021 is $ 8,250 and for the year 2022 is $ 4,500.

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Chapter 5 Solutions

FINANCIAL ACCOUNTING- LL W CONNECT PKG

Ch. 5 - Prob. 11SSQCh. 5 - Prob. 12SSQCh. 5 - 12. On May 1, 2021, Nees Manufacturing lends...Ch. 5 - Prob. 14SSQCh. 5 - Prob. 15SSQCh. 5 - Prob. 1AECh. 5 - Prob. 2AECh. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Prob. 10RQCh. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 17RQCh. 5 - Prob. 18RQCh. 5 - Prob. 19RQCh. 5 - Prob. 20RQCh. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23RQCh. 5 - Prob. 24RQCh. 5 - Prob. 25RQCh. 5 - Prob. 1BECh. 5 - Prob. 2BECh. 5 - Prob. 3BECh. 5 - Prob. 4BECh. 5 - Prob. 5BECh. 5 - Prob. 6BECh. 5 - Prob. 7BECh. 5 - Prob. 8BECh. 5 - Prob. 9BECh. 5 - Calculate uncollectible accounts using the aging...Ch. 5 - Calculate uncollectible accounts using the aging...Ch. 5 - Use the direct write-off method to account for...Ch. 5 - Use the direct write-off method to account for...Ch. 5 - Use the direct write-off method to account for...Ch. 5 - BE5–15 Calculate the missing amount for each of...Ch. 5 - Calculate interest revenue on notes receivable...Ch. 5 - Prob. 17BECh. 5 - Prob. 18BECh. 5 - Prob. 19BECh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Record credit sale and cash collection with a...Ch. 5 - Prob. 4ECh. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Establish an allowance for uncollectible accounts...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 9ECh. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - E5–12 Consider the following transactions...Ch. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - E5-16 Refer to the information in...Ch. 5 - Record notes receivable and interest revenue...Ch. 5 - E5–18 Below are amounts (in millions) from three...Ch. 5 - Compare the percentage-of-receivables method and...Ch. 5 - Compare the percentage-of-receivables method and...Ch. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Calculate the amount of revenue to recognize...Ch. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 5PACh. 5 - Prob. 6PACh. 5 - Prob. 7PACh. 5 - Prob. 8PACh. 5 - Prob. 9PACh. 5 - Prob. 1PBCh. 5 - Prob. 2PBCh. 5 - Prob. 3PBCh. 5 - Prob. 4PBCh. 5 - Compare the direct write-off method to the...Ch. 5 - P5–6B Wanda B. Rich is the CEO of Outlet Flooring,...Ch. 5 - Prob. 7PBCh. 5 - Prob. 8PBCh. 5 - Prob. 9PBCh. 5 - Prob. 1APCh. 5 - American Eagle Outfitters, Inc. AP5–2 Financial...Ch. 5 - Prob. 3APCh. 5 - Prob. 4APCh. 5 - Prob. 5APCh. 5 - Prob. 6APCh. 5 - Prob. 7APCh. 5 - Prob. 8AP
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