Question

Question: 4 Fleming Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 1% of net credit sales will eventually be uncollectible. Selected account balances at December 31, 2013, and December 31, 2014, appear below: 12/31/13 12/31/14 Net Credit Sales $400,000 $500,000 Accounts Receivable 60,000 80,000 Allowance for Doubtful Accounts 5,200 ? Instructions (a) Record the following events in 2014. Aug. 10 Determined that the account of Sue King for $800 is uncollectible. Sept. 12 Determined that the account of Tom Young for $3,700 is uncollectible. Oct. 10 Received a check for $500 as payment on account from Sue King, whose account had previously been written off as uncollectible. She indicated the remainder of her account would be paid in November. Nov. 15 Received a check for $300 from Sue King as payment on her account. (b) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2014. (c) What is the balance of Allowance for Doubtful Accounts at December 31, 2014? Question: 5 Zimmer Company sold the following two machines in 2020: Machine A Machine B Cost $76,000 $80,000 Purchase date July 1, 2016 January 1, 2017 Useful life 8 years 5 years Salvage value $4.000 $4.000 Depreciation method Straight-line Double-declining-balance Date sold July 1, 2020 August 1, 2020 Sales price $35,000 $16,000 Instructions 1. Pass the necessary journal entries to record purchase of the machine A and Machine B on 1 July 2016 and 1 January, 2017 respectively. 2. Calculate depreciation of the machine A and machine B for the year 2016, 2017, 2018, 2019. 3. Journalize all entries required to update depreciation and record the sales of the two assets in 2020.

Answer 1

Please hit LIKE button if this helped. Part a Aug 10 $ 800 Allowance for doubtful accounts Accounts Receivable (To record uncollectible) $ 800 Sep 12 $ 3,700 Allowance for doubtful accounts Accounts Receivable (To record uncollectible) $ 3,700 Oct 10 $ 500 Accounts Receivable Allowance for doubtful accounts (To re-instate the account) $ 500 Oct 10 $ 500 Cash Accounts Receivable (To record amount received) $ 500 Nov 15 $ 300 Accounts Receivable Allowance for doubtful accounts (To re-instate the account) $ 300 Nov 15 $ 300 Cash Accounts Receivable (To record amount received) $ 300 Part b $ 5,000 Bad Debt Expense Allowance for doubtful accounts (To record adjustment entry) $500,000*1% $ 5,000 Partc $ 5,200 Beginning Balance Less: Write off ($800+$3,700) Add: Recovered ($500+$300) Add: Adjustment Entry Ending Balance $ -4,500 $ 800 $ 5,000 $ 6,500