Question

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Help Save Warner Company's year-end unadjusted trial balance shows accounts receivable of $112,000, allowance for doubtful accounts of $730 (credit), and sales of $410,000. Uncollectibles are estimated to be 1.50% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles. View transaction list Journal entry worksheet Record the estimate of uncollectibles. Note: Enter debits before credits. Debit Credit General Journal Date Dec 31 Vlow general Journal Clear entry Record entry *11 Next >

Answer 1

Question 1

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Warner Company's year-end unadjusted trial balance shows

accounts receivable of $112000

allowance for doubtful accounts of $730 (credit), and

sales of $410,000.

Uncollectibles are estimated to be 1.50% of Accounts receivable.

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Prepare the December 31 year-end adjusting entry for uncollectibles.

Adjusting entry is:

Dr Bad debt expenses

Cr Allowance for doubtful accounts

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In the question specified that Uncollectibles are estimated to be 1.50% of Accounts receivable. So it is a Balance sheet method. And the calculated estimated figure is the desired ending balance of allowance for doubtful accounts

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Desired ending balance = 112000 * 1.50% = 1680

Before adjusting, the balance = $730

So the balance figure is the adjustment amount = 1680 - 730 = 950

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The balancing figure is adjusted to allowance for doubtful accounts

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Journal entry

Date	General journal	Debit	Credit
Dec 31	Bad debt expenses	$950
	Allowance for doubtful accounts		$950
	( to record estimated bad debt )

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Question 2

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Identifying following as intangibles assets, natural resources, or some other assets.

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Answer-

a	License	Intangible assets
b	Standing timber	natural resources
c	Leasehold Improvement	Intangible assets
d	Leasehold	Some other assets
e	Gold mine	natural resources
f	Gas field	natural resources
g	Oil field	natural resources
h	Franchise	Intangible assets
i	Trademark	intangible

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Intangible assets : An intangible asset is an asset which is not physical in nature. In other word An intangible asset is an asset that lacks physical substance.

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natural resources: Natural resources are resources that exist without any actions of humankind