1.a. Prepare in good format, an income statement.
b. Prepare in good format, a statement of owner’s equity.
c. Prepare a classified year-end balance sheet. (Note: A $9,000 installment on thelong-term note payable is due within one year.)
Account
Debit
Credit
Cash
$ 112,000
Accounts receivable
27,000
Prepaid rent
15,000
Prepaid Insurance
9,000
Office supplies
3,300
Office equipment
38,000
Accumulated depreciation–Equipment
$3,200
Building
288,000
Accumulated depreciation–Building
42,000
Land
700,000
Accounts payable
25,800
Salaries payable
14,500
Interest payable
2,500
Long-term note payable
72,000
P. Blessinger, Capital
910,000
P. Blessinger, Withdrawals
200,500
Service fees earned
430,800
Salaries expense
90,000
Insurance expense
5,200
Rent expense
5,000
Depreciation expense–Equipment
800
Depreciation expense–Building
7,000
Totals
$1,500,800
$1,500,800
2.
Prepare a) the July bank reconciliation and 2) prepare the journal entries necessary to
ing the company;s book balance of cash into conformity with the reconciled cash balance as of July 31.
a. On July 31, after all transactions have been recorded, the balance in the company's Cash account has a balance of $15,244.
. The company's bank statement shows a balance on July of $16,450.
c. Outstanding checks at July total $2,063.
d. A credit memo included with the bank statement indicates that the bank collected $570 on a note receivable for Topper.The $570 includes $550 principle and $20 interest.
e. A debit memo included with the bank statement shows a $107 NSF check from a customer, P. Flank.
f. A deposit placed in the bank's night depository on July 31 totaling $1,275 did not appear on the bank statement.
g. Included with the bank statement was a debit memorandum in the amount of $45 for check printing charges that have notbeen recorded on the company's books.
3.
On December 31, of the cu
ent year, Spectrum Company's unadjusted trial balance revealed the following: Accounts receivable of $185,600;Sales Revenue of $1,280,000; (75% were on credit), and Allowance for Doubtful Accounts of $1,600 (credit balance).
Required: Prepare the adjusting journal entry to record Spectrum's estimate for bad debts assuming:
1. 6.0% of the accounts receivable balance is assumed to be uncollectible.
2. Bad debts expense is estimated to be 1.5% of credit sales.
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet after adjustmentassuming the percentage of sales method is used.
4. Prepare the entry to write off a $1,500 account receivable on January 1 of the next year.
5. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet immediately after writingoff the account in part 4 assuming the percentage of sales method is used.