BB-Handout_5-Chapter 5

BB-Handout_5-Chapter - Handout#5-Chapter 5 Demonstration Problem 5-1 Accounting for Uncollectible Receivables The Solo Company was started on

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Handout #5-Chapter 5 Demonstration Problem 5-1: Accounting for Uncollectible Receivables The Solo Company was started on January 1, 2010. The following events occurred during 2010 and 2011. 2010 1. Provided $4,000 of services on account. 2. Collected $3,000 cash from accounts receivable. 3. Estimated uncollectible accounts expense to be 1.5 percent of 2010 credit sales. 2011 1. Wrote off $40 of accounts receivable that were deemed uncollectible. 2. Provided $6,500 of services on account. 3. Collected $5,400 cash from accounts receivable. 4. Received $5 from a bad debt that had been previously written off. Reinstated the account. 5. Recorded the $5 cash received from the receivable reinstated in Event No. 4. 6. Estimated uncollectible accounts expense to be 1 percent of 2011 credit sales. Required a. Record the events in a statements model under the titles of the affected accounts. Record a zero under each heading not affected by a given event. b. Determine the net realizable value of accounts receivable at the end of each year. 5-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Demonstration Problem 5-1: Work Paper, part a. Statements Model, 2010 Event Assets = Liab. + Equity Rev. – Exp. = Net Inc. Cash Flow No. Cash + Acct. Rec. + (Allow) = Ret. Ear. Beg. Bal. -0- + -0- + -0- = -0- + -0- -0- -0- = -0- -0- 1. + + = + = 2. + + = + = 3. + + = + = Totals 3,000 + 1,000 + (60) = -0- + 3,940 4,000 60 = 3,940 +3,000 NC Demonstration Problem 5-1: Work Paper, part a. Statements Model, 2011
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/10/2011 for the course ACC 201 taught by Professor Cromartie during the Spring '11 term at UNC Greensboro.

Page1 / 8

BB-Handout_5-Chapter - Handout#5-Chapter 5 Demonstration Problem 5-1 Accounting for Uncollectible Receivables The Solo Company was started on

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online