Question

Difficulty: 2 Medium L Learning Objective: 05-01 Recognize accounts receivable ote 05-05 Ay the procedure to write off accounts reonvable an uncollectible Check my work 100 points 5. Prepare a case balance sheet as of January 31, 2018. (Amounts to be deducted should be indicated with a minus sign) 3D FAMILY FIREWORKS Classified Balance Sheet January 31, 2018 Stockholder's Equity Total stockholders'qully Total abities and stockholders 5 0 uity S

Answer 1

3D Family Fireworks Journal Entery Date Particulars 2.1.2018 |Cash a/c Dr. To Service Revenue (Being services given for cash) Debit in $ Credit in $ 35100 35100 72400 6.1.2018 Accounts Receivable a/c Dr. To Service Revenue |(Being Services performed on account) 72400 1000 15.1.2018 Allowance for Uncollectible account Dr. To Accounts Receivable (Being uncollectible Receivable written off) 1000 31400 20.1.2018 Salaries expense a/c Dr. To Cash (Being Salary paid in cash) 31400 70000 22.1.2018 Cash a/c Dr. To Accounts Receivable (Being cash received from debtors) 70000 5500 25.1.2018 Accounts Payable a/c Dr. To Cash (Being accounts payable paid) 5500 13700 30.1.2018 Utilities expense a/c Dr. To Cash (Being utilities paid in cash) 13700

Adjustment Enteries Date Particulars Debit in $ Credit in $ 31.1.2018 Bad debts a/c Dr. 1100 To Allowance for Uncollectible account 1100 5000 x 0.2 = 1000 + 500 - 400 = 1100 (13600 + 72400-1000 - 70000 - 5000) x 0.05 = 500 (Being Bad debts estimated) Allowance for Uncollectible account = 1400 - 1000 = 400 31.1.2018 Supplies expense a/c Dr. 1800 To Supplies 1800 (Being supplies expense charged to Supplies) 2500 - 700 31.1.2018 Interest receivable a/c Dr. 100 To Interest revenue 100 20000 x 6% x 1/12 (Being Interest revenue recognized) 33500 31.1.2018 Salaries expense a/c Dr. To Salaries Payable (Being Salary Expense accrued) 33500 Dr. Closing Enteries Date Particulars 31.1.2018 Income Summary a/c To Salaries expense To Utilities expense To Bad debts To Supplies expense (Expense accounts closed) Debit in $ Credit in $ 81500 64900 13700 1100 1800 107500 100 31.1.2018 Service Revenue a/c Dr. Interest revenue a/c Dr. To Income Summary (Revenue accounts closed) 107600 26100 31.1.2018 Income Summary a/c Dr. To Retained Earnings (Profits transferred) 26100

Trial Balance As at 31.1.2018 Particulars Cash Accounts Receivable Allowance for Uncollectible account Supplies Notes Receivable Land Accounts Payable Common Stock Retained Earnings Service Revenue Salaries expense Utilities expense Totals Debit in $Credit in $ 78400 15000 400 2500 20000 77000 1700 96000 32400 107500 31400 13700 238000 238000 Adjusted Trial Balance As at 31.1.2018 Particulars Cash Accounts Receivable Allowance for Uncollectible account Supplies Notes Receivable Interest receivable Land Accounts Payable Salaries Payable Common Stock Retained Earnings Service Revenue Interest revenue Salaries expense Utilities expense Bad debts Supplies expense Totals Debit in $ Credit in $ 78400 15000 1500 700 20000 100 77000 1700 33500 96000 32400 107500 100 64900 13700 1100 1800 272700 272700

Accounts Receivable Beginning Bal. Add:Service provided Less:Written off Cash Received 13700 72400 -1000 -70000 15100 -5100 10000 500 Less: Bad debts @ 5% Allowance for Uncollectible account Beginning Bal. Less:Written off 1400 -1000 400

Statement of Income For the period ending 31.1.2018 Service Revenue Interest revenue 107500 100 107600 Less: Salaries expense Utilities expense Bad debts Supplies expense Net income 64900 13700 1100 1800 81500 26100 Statement of Retained Earnings For the period ending 31.1.2018 1.1.2018 Add:Net Income 31.1.2018 32400 26100 58500

Balance sheet As at 31.1.2018 Assets Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Assets Current Laibilities Cash 78400 Accounts Payable 1700 Accounts Receivable 15000 Salaries Payable 33500 35200 Allowance for Uncollectible account -1500 Supplies 700 Notes Receivable 20000 Interest receivable 112700 Shareholders Equity Common Stock 96000 Non Current Assets Retained Earnings 58500 154500 Land 77000 Total Assets 189700 Total Liabilities & Equity 189700 100