Question

The December 31, 2017 statement of financial position of Ocelot Machines has Accounts Receivable of ¥19,780, Inventory of ¥9,400; Allowance for doubtful accounts of ¥800; Cash ¥13,100; Share Capital Ordinary ¥20,000; Retained Earnings of ¥12,730; and Accounts payable of ¥8,750.Ocelot uses the perpetual inventory method. During December 2017, the following transactions occurred:

The December 31, 2017 statement of financial position of Ocelot Machines has Accounts Receivable of 19,780, Inventory of ¥9,400; Allowance for doubtful accounts of 800; Cash ¥13,100; Share Capital Ordinary 20,000; Retained Eamings of 12,730, and Accounts payable of +8,750.Ocelot uses the perpetual inventory method. During December 2017, the following transactions occurred 1. Ocelot accepted a 4-month, 7.5 % note from Leon ple in payment ofLeon's ¥1,600 account on Dec. 1, 2018. 2. Ocelot wrote off as uncollectible the accounts of Winn Ltd, (700) and Dixie Co. 430) Ocelot purchased V19,200 of inventory on account 4 Ocelot sold for ¥35,000 on account inventory that cost ¥25,000 5. Ocelot collected ¥25,900 from customersS on account. 3 6. Ocelot paid ¥15,300 on accounts payable 7. Ocelot received payment in full on Winn 8. Ocelot purchased Inventory for ¥1,600 cash. 9. Ocelot paid other operating expenses, 4,210 the account written off in #2. #1 11. A count of inventory on Dec. 31, 2018 reveals that ¥610 remains unused 12, If the company uses percentage of sale basis to estimate bad debts expense and anticipates 1.2 % of net sales to be uncollectible, what is the adjusting entry on December 31, 2018? ( # 1 is not a sale but a transfer) 13. If the company uses percentage of receivables basis to estimate bad debt expense and determines that uncollectible are expected to 4.9% of accounts receivable, what is the adjusting entry at December 31, 2018? Check through journal entries 1-11 to adjust amount accounts receivable and allowance for doubtful accounts. Show all your work for partial credit. Journalize the transactions Account Name Debit Credit 1. 2. | 3. 4 8. 9 10. 11 12. 13.

Answer 1

Debit 1600 Accounts Explanation Accounts Payable Notes payable Credit No 1 1600 1130 Allowance for Doubtful accounts 2 Accounts receivable 1130 Inventory Accounts Payable 3 19200 19200 Accounts receivable Sales Revenue 35000 35000 Cost of goods sold 25000 |Inventory 25000 25900 Cash 5 25900 Accounts receivable |Accounts Payable 15300 6 Cash 15300 1130 7 Accounts receivable Allowance for Doubtful accounts 1130 Cash 1130 Accounts receivable 1130 Inventory Cash 1600 1600 Operating Expenses 4210 Cash 4210 Interest expenses (1600*7.5%)/4 10 30 Interest Payable 30 9400+19200+1600-610 Cost of Goods Sold 11 29590 |Inventory 29590 Bad debts expenses 420 35000 1.2% 12 Allowance for Doubtful accounts 420 Bad debts expenses 13 527.25 Allowance for Doubtful accounts 527.25

Accounts Receivable Amoun Particulars 19780 Cash 35000 Allowance for Doubtful accounts Particulars Amount Opening Balance Sales Revenue 25900 1130 Allowance for Doubtful accounts 1130 Cash 1130 Closing Balance 27750 55910 55910 Closing Provision 27750*1.9% 527.3