The company has the following transactions during the year xxx1. A. Provided $8,400 of services on...
The company has the following transactions during the year xxx1.
A. Provided $8,400 of services on account.
B. Wrote off of $31 of uncollectible accounts receivable.
C. Recorded the adjusting entry, and estimated that uncollectible account expense would be 1% of revenue earned.
3. Based on the event “A” when the services were provided, determine how this transaction will affect the Financial Statements.
a) Increase Accounts Receivable and increase Retained Earnings by $8,400.
Increase Revenues and increase Net Income by $8,400. The cash flow is not affected.
b) Increase Cash and increase Inventory by $8,400. Increase Net Income. The cash flow is affected.
c) Increase Accounts Receivable and increase Retained Earnings by $8,400.
Increase Expenses and decrease Net Income by $8,400. The cash flow is not affected.
4. Based on the event “B” when the write off was registered, determine how this transaction will affect the Financial Statements.
a) Increase Accounts Receivable and increase Allowance for Uncollectible Accounts by $31.
Increase Expenses and decrease Net Income.
b) Decrease Accounts Receivable and decrease Allowance for Uncollectible Accounts by $31.
c) Increase Accounts Receivable and increase Allowance for Uncollectible Accounts by $31.
Increase Expenses and decrease Net Income. The cash flow is affected by $31 less.
5. Based on the event “C” when the adjusted entry was registered, determine how this transaction will affect the Financial Statements.
a) Decrease Allowance for Uncollectible Accounts and decrease Retained Earnings by $48.
Increase expenses and decrease Net Income by $48.
b) Decrease Allowance for Uncollectible Accounts and decrease Retained Earnings by $84.
Increase expenses and decrease Net Income by $84.
c) Increase Allowance for Uncollectible Accounts and decrease Retained Earnings by $84.
Increase expenses and decrease Net Income by $84.
6. If the Accounts Receivable has a balance of $430,000 after the period ending adjustment, the Uncollectible Account Expense has balance of $35,000 and the Allowance for Uncollectible Accounts has a balance of $25,000. Determine the net realizable value of the Accounts Receivable.
a) $430,000 - $35,000 - $25,000 = $370,000
b) $430,000 - $35,000 = $395,000
c) $430,000 - $25,000 = $405,000
Homework Answers
3.
Answer is
a) Increase Accounts Receivable and increase Retained Earnings by $8,400.
Increase Revenues and increase Net Income by $8,400. The cash flow is not affected.
4.
Answer is b) Decrease Accounts Receivable and decrease Allowance
for Uncollectible Accounts by $31
5.
Answer is
c) Increase Allowance for Uncollectible Accounts and decrease Retained Earnings by $84.
Increase expenses and decrease Net Income by $84
6.
Answer is c) $430,000 - $25,000 = $405,000
Add Answer to:
The company has the following transactions during the year
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Roth Service Co. experienced the following transactions for
2018, its first year of operations:
Provided $68,000 of services on account.
Collected $38,500 cash from accounts receivable.
Paid $28,000 of salaries expense for the year.
Roth adjusted the accounts using the following information from
an accounts receivable aging schedule:
Number of Days Past Due
Amount
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$
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0.01
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0.05
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Paragraph Styles Indicate how each event affects the elements of financial statements. Use the following letters...
Paragraph Styles Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.) Increase= Decrease Not Affected - NA 4) On December...
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2018:
Issued $10,000 of common stock for cash.
Provided $90,000 of services on account.
Provided $33,000 of services and received cash.
Collected $57,000 cash from accounts receivable.
Paid $16,000 of salaries expense for the year.
Adjusted the accounting records to reflect uncollectible
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2019:
Wrote off an uncollectible account for $750.
Provided $110,000 of services on account.
Provided $20,000 of services and...
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Roth Service Co. experienced the following transactions for
2018, its first year of operations:
Provided $68,000 of services on account.
Collected $38,500 cash from accounts receivable.
Paid $28,000 of salaries expense for the year.
Roth adjusted the accounts using the following information from
an accounts receivable aging schedule:
Number of Days Past Due
Amount
Percent Likely to Be Uncollectible
Allowance Balance
Current
$
15,400
0.01
0-30
5,400
0.05
31-60
3,900
0.10
61-90
1,100
0.30
Over 90 days
3,700
0.50
Required...
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Roth Service Co. experienced the following transactions for Year 1, its first year of operations: 1. Provided $110,000 of services on account. 2. Collected $89,000 cash from accounts receivable. 3. Paid $41,000 of salaries expense for the year. 4. Roth adjusted the accounts using the following information from an accounts receivable aging schedule: Allowance Balance Number of Days Past Due Current 0-30 31-60 61-90 Over 90 days Amount $9,500 4,000 2,500 2,000 3,000 Percent Likely to Be Uncollectible 0.01 0.05...
Paragraph Styles Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.) Increase= Decrease Not Affected - NA 4) On December...
2018:
Issued $10,000 of common stock for cash.
Provided $90,000 of services on account.
Provided $33,000 of services and received cash.
Collected $57,000 cash from accounts receivable.
Paid $16,000 of salaries expense for the year.
Adjusted the accounting records to reflect uncollectible
accounts expense for the year. Leach estimates that 7 percent of
the ending accounts receivable balance will be uncollectible.
2019:
Wrote off an uncollectible account for $750.
Provided $110,000 of services on account.
Provided $20,000 of services and...
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