Question

1. Using the Direct Write-off Method. Journalize the write off of $1000 for B Able.

2. Use the Allowance Method for the following transactions: For the month of December, XYZ has credit sales of $100,000. The bad debt expense is estimated at 1% of credit sales. Journal the adjusting entry for doubtful accounts.

3. Use the Allowance Method for the following transactions: For the month of December, ABC has an Accounts Receivable of $250,000 and an Allowance for Doubtful Accounts of $2000. Prepare the journal entry required, if the adjusting entry is based on 3% of accounts receivable.

4. The LNMOP company has an Accounts Receivable balance of $200,000. The Allowance for Doubtful Accounts has a balance of $2000.

Given the following aging schedule – journalize the adjusting entry for doubtful accounts.

                1-30                       31-60                     61-90                  over 90

                135,000                 50,000                   10,000                   5,000

                    1%                       4%                      10%                 50%

5. Using the Allowance Method – prepare the necessary journal entries

a) Write off uncollectible receivables in the amount of $1000.

b) $1000 that was previously written off – has been collected.

6. Find the interest accrued on a $10,000 note at 6% for 60 days.

7. A loan in the amount of $200,000 with 12% interest was taken out on June 1^st.

a) Prepare the journal entry for the issuance of the Note Payable.

b) Prepare the journal entry for the issuance of the Note Receivable.

c) Calculate the interest amount for December 31.

d) Prepare the adjusting journal entry if this was a Note Payable. (Expense)

e) Prepare the adjusting journal entry if this was a Note Receivable. (Revenue)

8. A magazine sold 100 yearly subscriptions valued at $120 per year.

a) Record the journal entry to receive cash.

b) Record the adjusting journal entry to record one month of the subscription being delivered.

9. Calculate the depreciation for the following scenarios. Bought a piece of equipment costing $30,000, with a salvage value of $10,000.

a) Figure the SL depreciation for year one and year two. Assuming a 10 year useful life.

b) Figure the units of production (activity) depreciation. Assuming that total units will be 100,000.

Year 1 – 20,000 units

   Year 2 - 30,000 units

c)Figure the double declining balance depreciation for year one and year two. Assuming a 4 year life.

d) Figure the SL depreciation; assuming a 10 year life; if the equipment was purchased on July 1^st.

e) Prepare the Journal Entry for a (SL Depreciation)

10. Bought a piece of equipment costing $110,000, with a salvage value of $10,000 and a useful life of 10 years. After 5 years, it was discovered that the salvage value will be $5,000 and the remaining useful life is only 2 years. What is the new depreciation using SL method?

11.A piece of equipment costing $22,000 with an accumulated depreciation of $10,000 was sold.

Prepare the necessary journal entries for the following:

a) Sold for $15,000 cash

b) Sold for $10,000 cash

c) Sold for $12,000 cash

12.Use the following key (a-d) to identify proper treatment of each contingent liability (Might not use them all - May repeat)

1. Record only
2. Record and Disclose
3. Disclose only
4. Do not record or disclose

1. ____Event is probable and is estimable
2. ____Event is probable by is not estimable
3. ____Event is reasonably possible
4. ____Event is remote

13. Prepare the following Journal entries for Bond Issuance

March 1      -- Issued $400,000 in bonds at face value.

June 3      -- Issued $100,000 in bonds for 98.

October 30 -- Issued $200,000 in bonds for 101.

Answer 1