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Question
The Corning Company uses the percent of sales method of accounting for uncollectible accounts receivable. At the beginning of the current year, the Allowance for Doubtful Accounts had normal balance of $8,000. The following transactions took place during the current year:
| Sept. 7 | Corning Company determined that the $10,600 account receivable of the Helena Company was uncollectible and wrote it off. |
| Nov. 9 | Helena Company paid $6,000 of the amount owed to the Corning Company. Corning Company does not expect further collections from the Helena Company. |
| Dec. 31 | Corning Company estimates that 0.5% of its $1,900,000 of credit sales would be uncollectible. |
Required:
Part a. Prepare journal entries to record these transactions.
Part b. Determine the balance of the Allowance for Doubtful Accounts at the end of the current year. Assume that the transactions above are the only transactions affecting this account during the year.
Answer
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Related questions
Q:
Use the information above to answer the following question. The company would report net cash provided by (used in) financing activities of:
A) $(2,500).
B) $2,000.
C) $5,000.
D) $6,000.
Q:
A corporation prepared its statement of cash flows for the year. The following information is taken from that statement: Net cash provided by operating activities
$14,500 Net cash provided by investing activities
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5,800 Cash balance, end of year
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C) ($15,400)
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Q:
Cash flows from financing activities:
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D) are always positive unless the company is experiencing serious financial trouble.
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Which of the following represent cash outflows from financing activities?
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Q:
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Q:
Assume a company uses the indirect method to prepare its statement of cash flows. If Inventory decreases and Unearned Revenue increases during an accounting period, what does the company do with the changes in these accounts to calculate cash flows from operating activities?
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Q:
Which of the following statements about calculation of cash flows from operating activities under the indirect method is correct?
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B) When the indirect method is used, depreciation expense is added to net income as a step in the process of calculating net cash flow provided by operating activities.
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Q:
What is the starting point for calculating cash flows from operations when the indirect method is used?
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Q:
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D) When a company repays a loan, it reports a cash inflow from financing activities.
Q:
Cash flows from financing activities include all of the following except:
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B) payment of interest.
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Q:
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The reporting of financing activities is identical under the indirect and direct methods for the statement of cash flows on the statement of cash flows.
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Use the information above to answer the following question. What is the depreciation expense for 2016?
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Q:
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Use the information above to answer the following question. If the units-of-production method is used, the depreciation expense for this period is:
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Q:
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Q:
Which of the following statements about straight-line depreciation is correct?
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B) When the straight-line method is used to compute depreciation, an asset's carrying value remains constant over the life of the asset.
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D) The straight line method of depreciation results in a straight-line increase of depreciation expense over the life of an asset.
Q:
Which of the following is not an amount that is needed to calculate straight-line depreciation?
A) The cost of the asset
B) An estimate of the assets useful economic life to the company
C) The estimated amount that the company will receive when it disposes of the asset
D) The cost the company will be required to incur to replace the asset
Q:
Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset?
A) To indicate how the asset has physically deteriorated
B) To show that the asset will eventually and gradually become obsolete
C) To record that the asset's market value declines over time
D) To match the cost of the asset to the period in which it generates revenue
Q:
The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation costs. One-half of the total cost or $250,000 is paid in cash; a note in the amount of $250,000 is signed. How should the company record this transaction?
A) Debit Cash for $250,000, debit Notes Payable for $250,000, and credit Equipment for $500,000
B) Debit Equipment for $500,000, credit Cash for $250,000, and credit Notes Payable for $250,000
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D) Debit Equipment for $450,000, debit Operating Expenses for $50,000, credit cash for $250,000, and credit Notes Payable for $250,000
Q:
Your company buys a computer system for $3 million and pays the vendor $200,000 to install the computer system. Your company should record:
A) $3 million as equipment and $200,000 as expenses.
B) $3.2 million as expenses.
C) $2.8 million as equipment and the rest as expenses.
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Q:
Under the cost principle, a company capitalizes:
A) all ordinary repair expenditures incurred in the use of an asset.
B) any interest incurred in borrowing money to help pay for asset acquisitions.
C) all reasonable and necessary costs of acquiring an asset and preparing it for use.
D) the total market value of individual assets acquired in a basket purchase.
Q:
The following information was summarized from the adjusted trial balance of Reliance Yacht Repair, Inc. as of September 30, 2015, the end of the companys fiscal year. Accounts Payable
$1,500 Accounts Receivable
6,000 Accumulated DepreciationEquipment
2,000 Cash
9,420 Common Stock
9,300 Equipment
4,000 Insurance Expense
500 Interest Expense
80 Notes Payable (long-term)
2,500 Notes Receivable (short-term)
5,500 Prepaid Rent
500 Retained Earnings
3,200 Service Revenue
11,000 Supplies
1,500 Supplies Expense
2,500 Unearned Revenue
2,000 Utilities Expense
1,500 Required:
Part a. Prepare the closing entry for the company for the year ended September 30, 2015.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entry, and then determine the ending balance.
Part c. Prepare a post-closing trial balance at September 30, 2015.
Q:
On December 31, 2016, Ditka Inc. had Retained Earnings of $267,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $168,100 and interest revenue of $81,300. The company used supplies in the amount of $87,900, advertising expenses were $16,400, salaries and wages totaled $18,300, and income tax expense was calculated as $13,700. During the year, the company declared and paid dividends of $6,000.
Required:
Part a. Prepare the closing entries dated December 31, 2016.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entries, and then determine the ending balance.