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Book/movie review
22/08/2022
Presented below is an aging schedule for McCann Company.
|
|
A
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B
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C
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D
|
E
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F
|
G
|
|
|
1
|
Customer
|
Total
|
Not Yet Due
|
Number of Days Past Due
|
||||
|
2
|
||||||||
|
3
|
30-Jan
|
31-60
|
61-90
|
Over 90
|
||||
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4
|
Amos
|
$22,000
|
|
$10,000
|
$12,000
|
|
|
|
|
5
|
Brian
|
40,000
|
$40,000
|
|
|
|
|
|
|
6
|
Chevy
|
57,000
|
16,000
|
6,000
|
|
$35,000
|
|
|
|
7
|
Drake
|
34,000
|
|
|
|
|
$34,000
|
|
|
8
|
Others
|
132,000
|
96,000
|
16,000
|
14,000
|
|
6,000
|
|
|
9
|
|
$285,000
|
152,000
|
$32,000
|
$26,000
|
$35,000
|
$40,000
|
|
|
10
|
Estimated Percentage Uncollectible
|
|
3%
|
6%
|
13%
|
25%
|
60%
|
|
|
11
|
Total Estimated Bad Debts
|
$42,610
|
$4,560
|
$1,920
|
$3,380
|
$8,750
|
$24,000
|
|
|
12
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|
|
|
|
|
|
|
|
At December 31, 2012, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12,000.
Instructions
(a) Journalize and post the adjusting entry for bad debts at December 31, 2012
(b) Journalize and post to the allowance account the following events and transactions in the year 2013
(1) On March 31, a $1,000 customer balance originating in 2012 is judged uncollectible.
(2) On May 31, a check for $1,000 is received from the customer whose account was written off as uncollectible on March 31.
(c) Journalize the adjusting entry for bad debts on December 31, 2013, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $800 and the aging schedule indicates that total estimated bad debts will be $28,600.
P10-1A
Rumblebuffin Company was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order.
Debits
1. Cost of filing and grading the land $4,000
2. Full payment to building contractor 700,000
3. Real estate taxes on land paid for the current year 5,000
4. Cost of real estate purchased as a plant site (land
building $45,000) 145,000
5. Excavation costs for new building 35,000
6. Architect’s fees on building plans 10,000
7. Accrued real estate taxes paid at time of purchase
of real estate 2,000
8. Cost of parking lots and driveways 14,000
9. Cost of demolishing building to make land suitable
for construction of new building 15,000
$930,000
Credit
10. Proceeds from salvage of demolished building $ 3,500
Instructions
Analyze the foregoing transactions using the following column headings. Insert the number of each transaction in the Item space, and insert the amounts in the appropriate columns. For amounts entered in the Other Accounts column, also indicate the account titles.
Item Land Buildings Other Accounts
P10-3A
On January 1, 2012, Tiggy Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,000. Related expenditures included: sales tax $1,700, shipping costs $150, unsurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Tiggy estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B: The recorded cost of this machine was $160,000. Tiggy estimates that the useful life of the is 4 years with a $10,000 salvage value remaining at the end of that time period.
Instructions
(a) Prepare the following for Machine A.
(1) The journal entry to record its purchase on January 1, 2012.
(2) The journal entry to record annual depreciation at December 31, 2012.
(b) Calculate the amount of depreciation expense that Tiggy should record for Machine B each year of its useful life, under the following assumptions.
(1) Tiggy uses the straight-line method of depreciation.
(2) Tiggy uses the declining-balance method. The rate used is twice the straight-line rate.
(3) Tiggy uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2012, 45,000 units; 2013, 35,000 units; 2014, 25,000 units; 2015, 20,000 units.
(c) Which method used to calculate depreciation on Machine B reports the highest amount of depreciation expense in year 1 (2012)? The highest amount in year 4 (2015)? The highest total amount over the 4-year period?
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