The first part I already have down...I am just having troubles with the followin
ID: 2549629 • Letter: T
Question
The first part I already have down...I am just having troubles with the following journal entries!
1. Depreciation on the equipment for the month of January is calculated using the Straight-Line method. At the time the equipment was pruchased, the estimated residual value of $4200 and a two year service life.
2. At the end of january, $23,000 kf accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 3% will not be collected
The first two journal entries are the ones I am getting wrong, please help!
[The following information applies to the questions displayed below On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances: Credit Debit $26,300 48,600 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2019) Common Stock Retained Earnings $5,400 21,200 58,000 21,000 2,700 29,700 62,000 47,000 28,300 Totals $175.100 $175,100 During January 2018, the following transactions occur: January 2. Sold gift cards totaling $10,400. The cards are redeemable for merchandise within one year of the purchase date. January 6. Purchase additional inventory on account, $159,000. January 15. Firework sales for the first half of the month total $147,000. All of these sales are on account. The cost of the units sold is $79,800. January 23. Receive $126,600 from customers on accounts receivable January 25. Pay $102,000 to inventory suppliers on accounts payable January 28. Write off accounts receivable as uncollectible, $6,000. January 30. Firework sales for the second half of the month total $155,000. Sales include $11,000 for cash and $144,000 on account. The cost of the units sold is $85,500. January 31. Pay cash for monthly salaries, $53,200.Explanation / Answer
1 Straight line depreciation = (21000-4200)*1/2 8400 Depreciation expense 700 (8400*1/12) Accumulated depreciation equipment 700 Total 2 Accounts receivable 23000 25600 48600 Percentage not collected 30% 3% Allowance for uncollectible accounts 6900 768 7668 Ending allowance for uncollectible accounts 7668 Beginning allowance for uncollectible accounts 5400 Bad debt expense 2268 Bad debt expense 2268 allowance for doubtful accounts 2268
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