Question

Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: 1. Provided $70,000 of services on account. 2. Collected $42,000 cash from accounts receivable. 3. Pald $32,000 of salaries expense for the year. 4. Adjusted the accounts using the following information from an accounts receivable aging schedule: Percent Likely to Be Uncollectible Allowance Balance Number of Days Past Due Current 0-30 31-60 61-90 Over 90 days Mount $20,720 1.000 1.960 1.680 2.240 Required a. Record the above transactions in general journal form and post to T-accounts. b. Prepare the income statement for Vulcan Service Co. for Year 1 c. What is the net realizable value of the accounts receivable at December 31, Year 1? Complete this question by entering your answers in the tabs below. Required A General Required AT Accounts Required B Required C Record the above transactions in general journal form. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your intermediate calculations and final answers to nearest whole dollar.) View transaction list View journal entry worksheet No Transaction General Journal - Debit Credit < Prex 4 of 6 Next >

Answer 1

No.	Accounts	debit	credit
1	Accounts receivable	$ 70,000
	service revenue		$ 70,000
2	Cash	$ 42,000
	Accounts receivable		$ 42,000
3	Salaries expense	$ 32,000
	cash		$ 32,000
4	Uncollectible accounts expenses	$    2,097
	allowance for doubtful accounts		$    2,097

Cash					Salaries expense
Beg Bal					Beg Bal
2	$ 42,000	$ 32,000	3		3	$ 32,000
end bal	$ 10,000				end bal	$ 32,000
Accounts receivable					Service revenue
Beg Bal					Beg Bal
1	$ 70,000	$ 42,000	2				$ 70,000	1
end bal	$ 28,000				end bal		$ 70,000
Uncolletible Accounts expense					Allowance for doubtful accounts
Beg Bal					Beg Bal
4	$    2,097						$    2,097	4
end bal	$    2,097				end bal		$    2,097

Income statement
For the year ended dec 31
Service revenue		$ 70,000
Opertating expenses
Salaries expense	$     32,000
Uncollectible accounts expense	$        2,097
total operating expenses		$ 34,097
Net income		$ 35,903
Net realisable value	25,903.00
28000-2097

Working

Current	20,720.00	0.01	207.00
0-30	1,400.00	0.05	70.00
31-60	1,960.00	0.10	196.00
61-90	1,680.00	0.30	504.00
Over 90 days	2,240.00	0.50	1,120.00
total	28,000.00		2,097.00