Accounting for uncollectible accounts using the allowance method [15-20 min]This problem c...

Accounting for uncollectible accounts using the allowance method [15-20 min]

This problem continues the Draper Consulting, Inc., situation from Problem of Chapter 7. Draper reviewed the receivables list from the January transactions (from Chapter 6). Draper identified on February 15 that a customer was not going to pay his receivable of $200 from December 9. Draper uses the allowance method for receivables, estimating uncollectibles to be 5% of January credit sales.

Requirements

1. Journalize the entry to record and establish the allowance using the percentage method for January credit sales.

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2. Journalize the entry to record the identification of the customer’s bad debt.

Preparing a bank reconciliation and journal entries [20-25 min]

This problem continues the Draper Consulting, Inc., situation from Problem of Chapter 6. Draper performs systems consulting. Draper’s February Cash from its general ledger is as follows:

Draper’s bank statement dated February 28, 2013, follows:

Requirements

1. Prepare the February bank reconciliation.

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2. Journalize and post any transactions required from the bank reconciliation. Key all items by date. Compute each account balance, and denote the balance as Bal.

Accounting for inventory using the perpetual system—LIFO [30-40 min]

This problem continues the Draper Consulting, Inc., situation from Problem in Chapter 5. Consider the January transactions for Draper Consulting that were presented in Chapter 5. (Cost data has been removed from the sale transactions.)

Requirements

1. Prepare perpetual inventory records for January for Draper using the LIFO perpetual method. (Note: You must figure cost on the 18th, 28th, and 31st.)

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2. Journalize and post the January transactions using the perpetual inventory record created in requirement 1. Key all items by date. Compute each account balance, and denote the balance as Bal.

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3. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. After posting all adjusting entries, prove the equality of debits and credits in the ledger.

Journalizing purchase and sale transactions—perpetual inventory; making closing entries, and preparing financial statements [30-40 min]

This problem continues the Draper Consulting, Inc., situation from Problem of Chapter 4. Draper performs systems consulting. Draper has also begun selling account­ing software. During January, Draper Consulting completed the following transactions:

Requirements

1. Open the following selected T-accounts in the ledger: Cash, Accounts receivable, Software inventory, Prepaid rent, Accumulated depreciation, Accounts payable, Salary payable, Common stock, Retained earnings, Dividends, Income summary, Service revenue, Sales revenue, Cost of goods sold, Salary expense, Rent expense, Utilities expense, and Depreciation expense.

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2. Journalize and post the January transactions. Key all items by date. Compute each account balance, and denote the balance as Bal.

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3. Journalize and post the closing entries. Denote each closing amount as Clo. After posting all closing entries, prove the equality of debits and credits in the ledger.

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4. Prepare the January income statement of Draper Consulting. Use the single­step format.

Start from the posted T-accounts and the adjusted trial balance that Draper Consulting prepared for the company at December 31:

Requirements

1. Complete the accounting worksheet at December 31.

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2. Journalize and post the closing entries at December 31. Denote each closing amount as Clo and an account balance as Bal.

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3. Prepare a classified balance sheet at December 31.