Question

On January 1, 2018, the general ledger of 3D Family Fireworks includes the following account balances:

Accounts Debit Credit

Cash	$	27,900
Accounts Receivable		15,600
Allowance for Uncollectible Accounts				$	4,800
Supplies		4,500
Notes Receivable (6%, due in 2 years)		24,000
Land		80,900
Accounts Payable					9,700
Common Stock					104,000
Retained Earnings					34,400

Totals 152900 152900

During January 2018, the following transactions occur:

January	2		Provide services to customers for cash, $55,100.
January	6		Provide services to customers on account, $92,400.
January	15		Write off accounts receivable as uncollectible, $4,500.
January	20		Pay cash for salaries, $33,400.
January	22		Receive cash on accounts receivable, $90,000.
January	25		Pay cash on accounts payable, $7,500.
January	30		Pay cash for utilities during January, $15,700.

The following information is available on January 31, 2018.

1. The company estimates future uncollectible accounts. The company determines $4,900 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
2. Supplies at the end of January total $950.
3. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31.
4. Unpaid salaries at the end of January are $35,500.

e. Prepare the closing entry for revenue.

f. Prepare the closing entry for expenses.

I have many already answered:

Specifically answer these five questions:

8. Prepare the adjusting entry for uncollectible accounts. Jan. 31

12. Prepare the closing entry for revenue. Jan. 31

13. Prepare the closing entry for expenses. Jan. 31

Calculate Accounts Receivable Turnover

Ratio of Allowance for Uncollectible Accounts to Accounts Receivable

No Date General Journal Debit Credit 55,100 1 Jan 02 Cash Service revenue 55,100 2 Jan 06 Accounts receivable 92,400 Service revenue 92,400 3 Jan 15 Allowance for uncollectible accounts 4,500 Accounts receivable 4,500 Jan 20 Salaries expense 4. 33,400 Cash 33,400 Cash 5 Jan 22 90,000 Accounts receivable 90,000 Accounts payable 6 Jan 25 7,500 Cash 7,500 Utilities expense Jan 30 15,700 Cash 15,700 Bad debt expense 8 Jan 31 Allowance for uncollectible accounts Supplies expense 9 Jan 31 3,550 Supplies 3,550 Interest receivable Jan 31 10 120 Interest revenue 120 Salaries expense 35,500 11 Jan 31 Salaries payable 35,500 Jan 31 Interest payable 120 Service revenue Supplies expense 13 Jan 31 Salaries expense Utilities expense 15,700 Bad debt expense 12 Analyze how well 3D Family Fireworks manages its receivables Calculate the receivables turnover ratio for the month of January (Hint: For the numerator, use total services provided to customers on account). If the industry average of the receivables turnover ratios for the month of January is 5.5 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? Accounts Receivable turnover: times The company is collecting more efficiently. (true or false) True (b) Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January. Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales? % Ratio of Allowance for Uncollectible Accounts to Accounts Receivable Improving Should the company expect improving or worsening conditions?

Answer 1

3D Family Fireworks Journal Enteries Debit in $ Credit in $ Particulars Date 2.1.2018 Cash a/c 55100 Dr. 55100 To Service Revenue (Services provided for cash) Accounts Receivable a/c Dr. 6.1.2018 92400 92400 To Service Revenue on account) |(Services provided 15.1.2018 Allowance for uncollectible accounts 4500 To Accounts Receivable 4500 |(Uncollectibles written off) 20.1.2018 Salary Expense a/c Dr. 33400 To Cash 33400 (Salary paid in cash) 22.1.2018 Cash a/c 90000 Dr. To A unts Receivable 90000 (Cash received from debtors) 25.1.2018 AcCounts Payable a/c Dr 7500 To Cash 7500 (Creditors paid) 30.1.2018 Utilities Expense a/c Dr. 15700 To Cash 15700 (Utilities paid in cash)

Adjusting Enteries Debit in $ Credit in $ Particulars Date 31.1.2018 Bad Debts a/c Dr. 1110 To Allowance for uncollectible accounts 1110 (Bad debts estimated )4900 x 20% 980 +430 1410 300 1110 15600 92400 4500-90000 4900 8600 x 5% 430 Allowance for Uncollectibles 4800 45000 300 31.1.2018 Supplies Expense a/c Dr. 3550 To Supplies 3550 (Supplies Expensed) 4500-950 3550 31.1.2018 Interest Receivable a/c Dr. 120 To Interest Income 120 (Interest Revenue accrued) 24000 x 6% x 1/12 120 31.1.2018 Salary Expense a/c Dr. 35500 To Salary Payable 35500 (Salary accrued)

Worksheet For the period ending 31.1.2018 Adjustments Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Unadjusted Adjusted Particulars Cash 116400 116400 Accounts Receivable 13500 13500 Allowance for uncollectible accounts 300 1110 1410 Interest Receivable 120 120 Supplies 4500 3550 950 24000 24000 Notes Receivable 6% Land 80900 80900 Accounts Payable 2200 2200 Salary Payable 35500 35500 Common Stock 104000 104000 Retained Earnings 34400 34400 Service Revenue 147500 147500 Interest Income 120 120 Salary Expense 33400 35500 68900 Utilities Expense 15700 15700 Bad Debts 1110 1110 Supplies Expense 3550 3550 Totals 28840 028 251 3251

Statement of Income For the period ending 31.1.2018 Service Revenue 147500 Interest Income 120 Total Revenue 147620 Less: Salary Expense 68900 Utilities Expense 15700 Bad Debts 1110 Supplies Expense 3550 89260 Net Income 58360 Statement of Retained Earnings For the period ending 31.1.2018 Beginning 34400 Net Income 58360 92760

Balance sheet As at 31.1.2018 Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Assets Current Liabilities Current Assets Accounts Payable Cash 116400 2200 Accounts Receivable Salary Payable 35500 13500 37700 Allowance for uncollectible accounts -1410 Interest Receivable 120 Supplies 129560 950 Shareholders Equity Non Current Assets Notes Receivable 6% 24000 Common Stock 104000 80900 Retained Earnings Land 92760 196760 234460 Total Liabilities & Equity Total Assets 234460 Receivables Turnover = Service Revenue/Avg. Receivables 147500 / (10800 + 12090) /2 = 127500 / 11445 = 11.14 Days in Receivables 365/ 11.14 32.76 Days Industry days in receivables is 365 /5.5 66.36 Days as compared to 32.76 Days of 3D...So 3D is collecting receivables more efficiently. Ratio of allo vance for uncollectibles Accounts Recei bl. 1.1.2018 4800 15600 0.3077 - 31.1.2018 1410/13500 0.1044 Company is improving

Closing Entry Debit in $ Credit in $ Particulars Date 31.1.2018 Income Summary a/c Dr. 89260 To Salary Expense To Utilities Expense 68900 15700 To Bad Debts 1110 To Supplies Expense 3550 (Expense accounts closed) 31.1.2018 Service Revenue a/c 147500 Dr. Interest Income a/c Dr. 120 To Income Summary |(Expense accounts closed) 31.1.2018 Income Summary a/c To Retained Earnings Dr. 58360 58360 (Profits transferred)