The following trial balance was prepared for Tile, Etc., Inc., on December 31, 2
ID: 2519186 • Letter: T
Question
The following trial balance was prepared for Tile, Etc., Inc., on December 31, 2016, after the closing entries were posted: Account Title Debit Credit Cash $ 165,000 Accounts Receivable 136,000 Allowance for Doubtful Accounts $ 23,500 Inventory 447,000 Accounts Payable 106,000 Common Stock 505,000 Retained Earnings 113,500 Totals $ 748,000 $ 748,000 Tile, Etc. had the following transactions in 2017: 1. Purchased merchandise on account for $635,000. 2. Sold merchandise that cost $475,000 for $1,000,000 on account. 3. Sold for $300,000 cash merchandise that had cost $182,000. 4. Sold merchandise for $245,000 to credit card customers. The merchandise had cost $118,000. The credit card company charges a 3 percent fee. 5. Collected $730,000 cash from accounts receivable. 6. Paid $665,000 cash on accounts payable. 7. Paid $156,000 cash for selling and administrative expenses. 8. Collected cash for the full amount due from the credit card company (see item 4). 9. Loaned $61,000 to J. Parks. The note had an 6 percent interest rate and a one-year term to maturity. 10. Wrote off $8,600 of accounts as uncollectible. 11. Made the following adjusting entries: (a) Recorded uncollectible accounts expense estimated at 1 percent of sales on account. (b) Recorded seven months of accrued interest on the note at December 31, 2017 (see item 9). Required a. Prepare general journal entries for these transactions; post the entries to T-accounts; and prepare an income statement, a statement of changes in stockholders’ equity, a balance sheet, and a statement of cash flows for 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Statement of Cash Flows, and Balance Sheet only: Items to be deducted must be indicated with a minus sign.) b. Compute the net realizable value of accounts receivable at December 31, 2017. c. If Tile, Etc. used the direct write-off method, what amount of uncollectible accounts expense would it report on the income statement? The following trial balance was prepared for Tile, Etc., Inc., on December 31, 2016, after the closing entries were posted: Account Title Debit Credit Cash $ 165,000 Accounts Receivable 136,000 Allowance for Doubtful Accounts $ 23,500 Inventory 447,000 Accounts Payable 106,000 Common Stock 505,000 Retained Earnings 113,500 Totals $ 748,000 $ 748,000 Tile, Etc. had the following transactions in 2017: 1. Purchased merchandise on account for $635,000. 2. Sold merchandise that cost $475,000 for $1,000,000 on account. 3. Sold for $300,000 cash merchandise that had cost $182,000. 4. Sold merchandise for $245,000 to credit card customers. The merchandise had cost $118,000. The credit card company charges a 3 percent fee. 5. Collected $730,000 cash from accounts receivable. 6. Paid $665,000 cash on accounts payable. 7. Paid $156,000 cash for selling and administrative expenses. 8. Collected cash for the full amount due from the credit card company (see item 4). 9. Loaned $61,000 to J. Parks. The note had an 6 percent interest rate and a one-year term to maturity. 10. Wrote off $8,600 of accounts as uncollectible. 11. Made the following adjusting entries: (a) Recorded uncollectible accounts expense estimated at 1 percent of sales on account. (b) Recorded seven months of accrued interest on the note at December 31, 2017 (see item 9). Required a. Prepare general journal entries for these transactions; post the entries to T-accounts; and prepare an income statement, a statement of changes in stockholders’ equity, a balance sheet, and a statement of cash flows for 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Statement of Cash Flows, and Balance Sheet only: Items to be deducted must be indicated with a minus sign.) b. Compute the net realizable value of accounts receivable at December 31, 2017. c. If Tile, Etc. used the direct write-off method, what amount of uncollectible accounts expense would it report on the income statement?
Explanation / Answer
t-accounts
b. Net realizable value of accounts Receivable = $372,500
TILE ETC., INC. General Journal for the year ended December 31, 2017 Ref Account Title Debit Credit 1 Inventory 635000 Accounts Payables 635000 2a Accounts Receivable 1000000 Sales 1000000 2b Cost of goods sold 475000 Inventory 475000 3a Cash 300000 Sales 300000 3b Cost of goods sold 182000 Inventory 182000 4a Accounts Receivable - Credit card 237650 Card Charges 7350 Sales 245000 4b Cost of goods sold 118000 Inventory 118000 5 Cash 730000 Accounts Receivable 730000 6 Accounts Payables 665000 Cash 665000 7 Selling and administrative Expenses 156000 Cash 156000 8 Cash 237650 Accounts Receivable - Credit card 237650 9 Note Receivable 61000 Cash 61000 10 Allowance for doubtful accounts 8600 Accounts Receivable 8600 11a Bad Debt Expense 10000 Allowance for doubtful accounts 10000 11b Interest Receivable 2135 Interest Revenue 2135Related Questions
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