ACC 422 Week 1 Brief Exercise 1

ACC 422 Week 1 Brief Exercise 1  | Assignment Help | University Of Phoenix 

Brief Exercise 7-1

 Sarasota Enterprises owns the following assets at December 31, 2017.

Cash in bank—savings account 69,900 Checking account balance 25,300

Cash on hand 9,840 Postdated checks 760

Cash refund due from IRS 40,400 Certificates of deposit (180-day) 95,180

What amount should be reported as cash?

Brief Exercise 7-7

Metlock Family Importers sold goods to Tung Decorators for $36,000 on November 1, 2017, accepting Tung’s $36,000, 6-month, 6% note.

Prepare Metlock’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Exercise 7-4

  Your answer is correct.

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $2,265 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $123,820 as shown in the ledger.

The following information is available for your first year in business.

(1) Collections from customers $298,980

(2) Merchandise purchased 483,200

(3) Ending merchandise inventory 135,900

(4) Goods are marked to sell at 40% above cost

Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.

Exercise 7-4

  Your answer is correct.

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $2,265 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $123,820 as shown in the ledger.

The following information is available for your first year in business.

(1) Collections from customers $298,980

(2) Merchandise purchased 483,200

(3) Ending merchandise inventory 135,900

(4) Goods are marked to sell at 40% above cost

Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.

Exercise 7-9

The trial balance before adjustment of Oriole Inc. shows the following balances.

Dr. Cr.

Accounts Receivable $87,800

Allowance for Doubtful Accounts 2,450

Sales Revenue (all on credit) $707,800

Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,645 credit balance. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Exercise 7-22

Flint, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April.

1. On April 1, it established a petty cash fund in the amount of $248.

2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows.

Delivery charges paid on merchandise purchased $73

Supplies purchased and used 38

Postage expense 46

I.O.U. from employees 30

Miscellaneous expense 49

The petty cash fund was replenished on April 10. The balance in the fund was $7.

3. The petty cash fund balance was increased by $113 to $361 on April 20.

Prepare the journal entries to record transactions related to petty cash for the month of April. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Exercise 7-24 (Part Level Submission)

Metlock Lansbury Company deposits all receipts and makes all payments by check. The following information is available from the cash records.

June 30 Bank Reconciliation

Balance per bank $11,200

Add: Deposits in transit 2,464

Deduct: Outstanding checks (3,200 )

Balance per books $10,464

Month of July Results

Per Bank Per Books

Balance July 31 $13,840 $14,800

July deposits 8,000 9,296

July checks 6,400 4,960

July note collected (not included in July deposits) 1,600

July bank service charge 24

July NSF check from a customer, returned by the bank (recorded by bank as a charge) 536

(a)

Prepare a bank reconciliation going from balance per bank and balance per book to correct cash balance.

Concept for Analysis 7-2 (Essay)

Kimmel Company uses the net method of accounting for sales discounts. Kimmel also offers trade discounts to various groups of buyers.

On August 1, 2017, Kimmel sold some accounts receivable on a without recourse basis. Kimmel incurred a finance charge.

Kimmel also has some notes receivable bearing an appropriate rate of interest. The principal and total interest are due at maturity. The notes were received on October 1, 2017, and mature on September 30, 2019. Kimmel’s operating cycle is less than one year.

Problem 7-4 (Part Level Submission)

From inception of operations to December 31, 2017, Blue Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments to the allowance account were made. Blue’s usual credit terms are net 30 days.

The balance in Allowance for Doubtful Accounts was $141,100 at January 1, 2017. During 2017, credit sales totaled $9,076,000, the provision for doubtful accounts was determined to be $181,520, $90,760 of bad debts were written off, and recoveries of accounts previously written off amounted to $18,540. Blue installed a computer system in November 2017, and an aging of accounts receivable was prepared for the first time as of December 31, 2017. A summary of the aging is as follows.

(a)

Prepare a schedule analyzing the changes in Allowance for Doubtful Accounts for the year ended December 31, 2017. Show supporting computations in good form. (Hint: In computing the 12/31/17 allowance, subtract the $62,700 write-off.)

(b)

Prepare the journal entry for the year-end adjustment to the Allowance for Doubtful Accounts balance as of December 31, 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)