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P-18-7A P-16-9a
P 16-9A (1b Dr. Bad Debt Exp. $6,620)
Uncollectible Accounts Percentage of Sales and Percentage of Receivables. At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Yang’s Gift Shop was $30,000 Credit sales for the year were $355,200.
Required:
Make the necessary adjusting entry in general journal from under each of the following assumptions. Show calculations for the amount of each adjustment and the resulting net realize value.
1. Allowance for Bad Debts has a credit balance of $330.
a. The percentage of sales method is used and uncollectible accounts are estimated to be 2.0% of credit sales.
b. The percentage of receivables method is used and an analysis of the accounts produces an estimate of $6,950 in uncollectible accounts.
2. Allowance for bad debts has a debit balance of $400.
a. The percentage of sales method is used and uncollectible accounts are estimated to be 1.5% of credit sales.
b. The percentage of receivables method is used and an analysis of the accounts produces an estimate of $5,685 in uncollectible accounts.
P 18-7A (Depr exp. For year 8 (a) 7,000.00 (b) 1,968.89 (c) 1,555,56
Straight Line, Declining Balance and Sum of The Years Digits Methods. A machine is purchased January 1 at a cost of $59,000. It is expected to serve for eight years and have a salvage value of $3,000.
Required:
Prepare a schedule showing depreciation for each year and the book value at the end of each year using the following methods:
a. Straight line
b. Double declining balance (round to two decimal places)
c. Sum of the years digits (round to two decimal places)
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h2> 16-9A
pts.
– pense
x 1, 20–
$ 1,745 872 GENERAL JOURNAL Date Account Debit Credit -Jul
1,300 Calculations: GENERAL JOURNAL Date Account Debit Credit 1,745 Calculations: Adjustment Amount Accounts receivable, December 31, 20– $ 1,745 GENERAL JOURNAL Date Account Debit Credit 1,745 Calculations: Name: ly / years = x = Depreciation x Mark Sears: Enter as a formula Rate = Depreciation Mark Sears: Enter as a formula 25% Mark Sears: Enter as a formula Mark Sears: Enter as a formula Name: 1. Original Cost Salvage Value Estimated Life years Book Value 2. Estimated Life Percentage x 2 Book Value x Rate = Depreciation 1 2 3 3. [Life x (Life + 1)] / 2 = Denominator Original Cost – Salvage Value = Depreciable Cost Year Annual Depreciation Book Value 0 Mark Sears: Enter as a formula Mark Sears: Enter as a formula Mark Sears: Enter as a formula Mark Sears: Enter as a formula Mark Sears: Enter book values for Years 1-8 as formulas Mark Sears: Enter as a formula Mark Sears: Enter as a formula Mark Sears: Enter as a formula 3 1,745 15 Bad Debt Expense 1,300 1,300 2 Accounts Receivable/V. Lawrence 1,745 Accounts Receivable/V. Lawrence 1,745 Reinstated account receivable Accounts Receivable/D. Utter 1,300 10 points 3 points 2 points *requirement 1 3 points 10 points *requirement 1 3 points
2
/
1
6
–
9
/
Problem
Name:
1
0
1a.
GENERAL JOURNAL
Date
Account
Debit
Credit
20–
Dec.
8
May
Bad Debt E
x
1,
7
4
5
Allowance for Bad Debts
1,745
Calculations:
Credit Sales
Percentage
=
Adjustment Amount
$ 1,745
5.0%
$
872
Accounts receivable, December
3
Allowance for bad debts, new balance
Net realizable value
$873
1b.
20– Dec.
15
Bad Debt Expense
1,300
Accounts Receivable
Estimate through analysis (provided)
Allowance for bad debts, previous balance
Adjustment amount
Accounts receivable, December 31, 20–
$ 1,300
Allowance for bad debts, new balance
130
Net realizable value
$ 1,170
2a.
20– Dec. Accounts Receivable 1,745
Uncollectible Accounts Recovered
Credit Sales x Percentage
=
$ 1,745 5.0%
$ 872
Allowance for bad debts, new balance 872 Net realizable value
$ 873
2b.
20– Dec.
Cash
Accounts Receivable 1,745
Estimate through analysis (provided)
Allowance for bad debts, previous balance
Adjustment amount Accounts receivable, December 31, 20–
Allowance for bad debts, new balance
Net realizable value
E18-2A
Exercise 18-2A
10pts.
1.
Straight-Line Method
Original Cost
Salvage Value
Estimated Life
Year
Depreciation
years
Year 1
Year 3
2.
Double-Declining-Balance Method
Estimated Life Percentage
100%
Mark Sears: Enter as a formula
x 2
Double-declining rate
Book Value
Rate
Year 1
Year 2
Year 3
3.
Sum-of-the-Years’-Digits Method
[Life
(Life + 1)]
/ 2 =
Denominator
8 9
25%
Mark Sears: Enter as a formula
Original Cost – Salvage Value =
Depreciable Cost
$ 27,000
3,00
$ 24,000
Mark Sears: Enter as a formula
Mark Sears: Enter as a formula
Depreciable Cost x
Year 1 $ 27,000
25%
Mark Sears: Enter as a fraction
2/25
Mark Sears: Enter as a formula
Year 3
$ 20,225
Mark Sears: Enter as a fraction5/56
P18-7A
Problem 18-7A 10pts.
Straight-Line MethodYearly Depreciation
Year
Annual Depreciation
0
1
2
3
4
5
6
7
8
Double-Declining-Balance Method 100% / years =
Double-declining rate
Year Annual Depreciation Book Value
0
Mark Sears: Enter book values for Years 1-8 as formulas
4
5
6
7
8
Sum-of-the-Years’-Digits Method Depreciable Cost
x Rate = Depreciation
1
Mark Sears: Enter as a fraction
Mark Sears: Enter book values for Years 1-8 as formulas
2
4
5
6
7
8
E16-7A
10pts.
GENERAL JOURNAL
Date Account Debit Credit
20-1
May 8 Bad Debt Expense 1,745
Accounts Receivable/V. Lawrence
Wrote off uncollectible account
July
Accounts Receivable/D. Utter
Wrote off uncollectible account
Sept.
Uncollectible Accounts Recovered 1,745
Reinstated account receivable
2 Cash 1,745
Collection on account
20-2
May 15 Accounts Receivable/D. Utter 1,300
Uncollectible Accounts Recovered 1,300
15 Cash 1,300
Collection on account
Sheet1
Week 1 Grading Rubric
Point Available
Points Earned
E16-7A
10 points
P16-9A
*requirement 1
3 points
*requirement 2
*requirement 3
2 points
*requirement 4
E18-2A 10 points
*requirement 2 3 points
*requirement 3
4 points
E18-7A
*requirement 2 3 points
*requirement 3 4 points
Total Score
