Question

• Prepare the journal entry to adjust the be e journal entry to adjust the beginning allowance for uncollectible accounts? 10-On June 13 of the current year, KT Factory sold merchandise to a customer for $10,000 w credit terms 2/10, n/30. The customer paid the full amount due on June 20. KT uses the grows method of accounting for cash discounts. • Prepare the appropriate journal entries for June 13 and June 20. 11-At the end of its first year of operations, LG Industries estimates that sales returns in the amount of $20,000 will occur during Year 2. The cost of the inventory expected to be returned is $12,000. All of LG's sales are made for cash and the company uses a perpetual inventory system. Assume that no returns have occurred as of the end of Year 1. • Prepare the appropriate adjusting journal entry to record the expected sales returns. • Prepare the adjusting entry for the inventory expected to be returned in Year 2. 12-What is the present value of $5,000 to be received five years from now, assuming an interest rate of 8%? 13-MG Company uses the allowance method. At the end of its first year of operations, the company estimates that it will not collect $2,500 of its accounts receivable. Prepare the appropriate adjusting journal entry to establish the estimate for uncollectible account.

Answer 1

Answer to Question 10. Credit Date June 13 Debit 10,000 10,000 Account Titles and Explanation Accounts Receivable Sales (To record Sales made on account) Cash ($10,000 * 98%) Sales Discounts ($10,000 * 2%) Accounts Receivable (To record payment made within discounted period) June 20 9,800 200 10,000