Question

Workshop 3 Problems Student Q Search Sheet Calibri (Body) , 12 - A- A = = = 0 5p Wrap Text Σ AutoSum' ΑΡ. General $ % Merge & Center ) 0.00 Conditional Format Formatting as Table Cell Styles Insert Delete Format Clear Sort & Filter Home Insert Page Layout Formulas Data Review View Xcut Copy Paste Format BI U DA = = G24 x fx A B C D E F G H I 1 3.3 Calculation of Allowance for Uncollectibles using Percent of Revenue Method 2 Background Information: Donald Duck and Friends began operations on January 1, 2017 The following events occurred during the year J N O P Q R S T U V W X K L M Points: 32 items @ 1 pt. each = 32 points. 1 Provided lawn services on account for $90,000 2 Collected $82,000 cash from accounts receivable 3 Paid salaries to Mickey for the year of $30,000 4 Company estimates 2% of the on account revenue to be uncollectible based on percent of revenue method. a) Complete the accounting equation for the different transactions. 14 Event Donald and Friends Company Accounting Equation Assets Accounts Rec - Allowance Equity = Retained Earnings Service Revenue Salaries Expense Uncollectible accounts expense Total + S - - $ b) Prepare an income statement for 2017 Donald Duck and Friends Income Statement For the Year Ended December 31, 2017 30 Operating Expense Net Income 37 C) Prepare a year-end balance Sheet Donald Duck and Friends Balance Sheet As of December 31,2017 42 Accets Problem 3.1 Problem 3.2 Problem 3.3 Problem 3.4 Problem 3.5 Problem 3.6 + Ready @ - - - + 100%
Can someone help and explain this??

Answer 1

Allowance for Doubtful Accounts = 2% of Credit revenues

(a) Complete the equation for the different transactions ACCOUNTING EQUATION ASSETS Event Cash | + Accounts Rec. | - Allowance 1. $ 90,000.00 $ - $ 82,000.00 $ -82,000.00 $ . $ -30,000.00 $ - 41 $ $ 1,800.00 Total | $ 52,000.00 + $ 8,000.00 - $ 1,800.00 $ EQUITY Retained Earnings $ 90,000.00 $ - | $ -30,000.00 $ 1,800.00 $ 58,200.00 $ Ś = $ 90,000.00 (b) Prepare an Income Statement for 2017 INCOME STATEMENT Sales Revenue Operating Expenses Salaries $ 30,000.00 Allowances for Doubtful Accounts $ 1,800.00 Total Operating Expenses Net Income $ 31,800.00 58,200.00 $ 52000 8000 1800 (c) Prepare a year end Balance Sheet BALANCE SHEET ASSETS Cash Accounts Receivable Less: Allowance for Doubtful Accounts Total Assets LIABILITIES Stockholder's Equity Retained Earnings Total Stockholder's Equity Total Liabilities and Shareholder's Equity 6200 58200 58200 58200 58200

= 2% of $90,000

= $1,800