Week
\n2 Assignment
\nACC
\n205
\nDate:<\/p>\n
1. Recognition of
\nconcepts. Jim Armstrong operates a small company that books enter\u00c2\u00adtainers
\nfor theaters, parties, conventions, and so forth. The company\u00e2\u0080\u0099s fiscal year
\nends on June 30. Consider the following items and classify each as either (1)
\npre\u00c2\u00adpaid expense, (2) unearned revenue, (3) accrued expense, (4) accrued
\nrevenue, or (5) none of the foregoing.
\na Interest owed on the company’s bank
\nloan, to be paid in early July b Professional
\nfees earned but not billed as of June 30
\nc Office supplies on hand at year-end
\nd An advance payment from a client for a
\nperformance next month at a convention
\ne The payment in part (d) from the
\nclient’s point of view
\nf Amounts paid on June 30 for a 1-year
\ninsurance policy
\ng The bank loan payable in part (a)
\nh Repairs to the firm’s copy machine,
\nincurred and paid in June <\/p>\n
2. Understanding the closing process. Examine
\nthe following list of accounts: <\/p>\n
Note Payable <\/p>\n
Accumulated Depreciation: Building<\/p>\n
Alex Kenzy, Drawing <\/p>\n
Accounts Payable <\/p>\n
Product Revenue <\/p>\n
Cash <\/p>\n
Accounts Receivable <\/p>\n
Supplies Expense <\/p>\n
Utility Expense <\/p>\n
Which of the
\npreceding accounts
\na. appear on a post-closing trial
\nbalance?
\nb. are commonly known as temporary,
\nor nominal, accounts?
\nc. generate a debit to Income
\nSummary in the closing process?
\nd. are
\nclosed to the capital account in the closing process?
\n3. Adjusting entries
\nand financial statements. The following information pertains to Sally
\nCorporation:
\n\u00c2\u00b7
\nThe company previously collected $1,500
\nas an advance payment for services to be rendered in the future. By the end of
\nDecember, one half of this amount had been earned.
\n\u00c2\u00b7
\nSally Corporation provided $1,500 of
\nservices to Artech Corporation; no billing had been made by December 31.
\n\u00c2\u00b7
\nSalaries owed to employees at year-end
\namounted to $1,000.
\n\u00c2\u00b7
\nThe Supplies account revealed a balance
\nof $8,800, yet only $3,300 of supplies were actually on hand at the end of the
\nperiod.
\n\u00c2\u00b7
\nThe company paid $18,000 on October 1 of
\nthe current year to Vantage Property Management. The payment was for 6 months\u00e2\u0080\u0099
\nrent of Sally Corporation\u00e2\u0080\u0099s headquarters, beginning on November 1.
\nSally Corporation\u00e2\u0080\u0099s accounting year ends on December
\n31.
\nInstructions
\nAnalyze
\nthe five preceding cases individually and determine the following:
\na.
\nThe typeof adjusting entry needed at year-end (Use the following codes:
\nA, adjust\u00c2\u00adment of a prepaid expense; B, adjustment of an unearned revenue; C,
\nadjustment to record an accrued expense; or D, adjustment to record an accrued
\nrevenue.)
\nb.
\nThe year-end journal entry to adjust the accounts
\nc.
\nThe income statement impact of each adjustment (e.g., increases total revenues
\nby $500)
\n\u00e2\u0080\u00a2 The company previously collected $1,500 as an
\nadvance payment for services to be rendered in the future. By the end of
\nDecember, one half of this amount had been earned.
\n1.)
\nB,
\nadjustment of an unearned revenue
\n2.)
\nSally
\nCorporation provided $1,500 of services to Artech Corporation; no billing had
\nbeen made by December 31.
\n3.)
\nSalaries
\nowed to employees at year-end amounted to $1,000.
\n4.)
\nThe
\nSupplies account revealed a balance of $8,800, yet only $3,300 of supplies were
\nactually on hand at the end of the period.
\n5.)
\nThe
\ncompany paid $18,000 on October 1 of the current year to Vantage Property
\nManagement. The payment was for 6 months\u00e2\u0080\u0099 rent of Sally Corporation\u00e2\u0080\u0099s
\nheadquarters, beginning on November 1.<\/p>\n
4. Adjusting entries.
\nYou have been retained to examine the records of Mary\u00e2\u0080\u0099s Day Care Center as of
\nDecember 31, 20X3, the close of the current reporting period. In the course of
\nyour examination, you discover the following:
\nOn January 1, 20X3, the
\nSupplies account had a balance of $1,350. During the year, $5,520 worth of
\nsupplies was purchased, and a balance of $1,620 remained unused on December 31.<\/p>\n
\u00c2\u00b7 Unrecorded
\ninterest owed to the center totaled $275 as of December 31.
\n\u00c2\u00b7 All
\nclients pay tuition in advance, and their payments are credited to the Unearned
\nTuition Revenue account. The account was credited for $65,500 on August 31.
\nWith the exception of $15,500 all amounts were for the current semester ending
\non December 31.
\n\u00c2\u00b7 Depreciation
\non the school\u00e2\u0080\u0099s van was $3,000 for the year.
\n\u00c2\u00b7 On
\nAugust 1, the center began to pay rent in 6-month installments of $24,000. Mary
\nwrote a check to the owner of the building and recorded the check in Pre\u00c2\u00adpaid
\nRent, a new account.
\n\u00c2\u00b7 Two
\nsalaried employees earn $400 each for a 5-day week. The employees are paid
\nevery Friday, and December 31 falls on a Thursday.
\n\u00c2\u00b7 Mary\u00e2\u0080\u0099s
\nDay Care paid insurance premiums as follows, each time debiting Pre\u00c2\u00adpaid
\nInsurance: <\/p>\n
Date Paid <\/p>\n
Policy No. <\/p>\n
Length of Policy <\/p>\n
Amount <\/p>\n
Feb. 1, 20X2 <\/p>\n
1033MCM19 <\/p>\n
1 year <\/p>\n
$540 <\/p>\n
Jan. 1, 20X3 <\/p>\n
7952789HP <\/p>\n
1 year <\/p>\n
912 <\/p>\n
Aug. 1, 20X3 <\/p>\n
XQ943675ST <\/p>\n
2 years <\/p>\n
840 <\/p>\n
Instructions <\/p>\n
The center\u00e2\u0080\u0099s accounts were last adjusted on December
\n31, 20X2. Prepare the adjusting entries necessary under the accrual basis of
\naccounting.
\nA.
\nOn
\nJanuary 1, 20X3, the Supplies account had a balance of $1,350. During the year,
\n$5,520 worth of supplies was purchased, and a balance of $1,620 remained unused
\non December 31. <\/p>\n
B.
\nUnrecorded
\ninterest owed to the center totaled $275 as of December 31
\nC.
\nAll
\nclients pay tuition in advance, and their payments are credited to the Unearned
\nTuition Revenue account. The account was credited for $65,500 on August 31.
\nWith the exception of $15,500 all amounts were for the current semester ending
\non December 31. <\/p>\n
D.
\nDepreciation
\non the school\u00e2\u0080\u0099s van was $3,000 for the year. <\/p>\n
E. On
\nAugust 1, the center began to pay rent in 6-month installments of $24,000. Mary
\nwrote a check to the owner of the building and recorded the check in Prepaid
\nRent, a new account. <\/p>\n
F. Two salaried employees earn $400
\neach for a 5-day week. The employees are paid every Friday, and December 31
\nfalls on a Thursday.<\/p>\n
G. Mary\u00e2\u0080\u0099s
\nDay Care paid insurance premiums as follows, each time debiting Prepaid
\nInsurance:<\/p>\n
5. Bank reconciliation and entries. The
\nfollowing information was taken from the accounting records of Palmetto Company
\nfor the month of January: <\/p>\n
Balance per bank <\/p>\n
$6,150 <\/p>\n
Balance per company records <\/p>\n
3,580 <\/p>\n
Bank service charge for January <\/p>\n
20 <\/p>\n
Deposits in transit <\/p>\n
940 <\/p>\n
Interest on note collected by bank <\/p>\n
100 <\/p>\n
Note collected by bank <\/p>\n
1,000 <\/p>\n
NSF check returned by the bank with the bank
\n statement <\/p>\n
650 <\/p>\n
Outstanding checks <\/p>\n
3,080 <\/p>\n
Instructions:
\na. Prepare Palmetto\u00e2\u0080\u0099s January bank
\nreconciliation.
\nb. Prepare any
\nnecessary journal entries for Palmetto.<\/p>\n
6. Direct write-off method. Harrisburg
\nCompany, which began business in early 20X7, reported $40,000 of accounts
\nreceivable on the December 31, 20X7, balance sheet. Included in this amount
\nwas $550 for a sale made to Tom
\nMattingly in July. On January 4, 20X8, the company learned that Mattingly had
\nfiled for personal bankruptcy. Harrisburg uses the direct write-off method to
\naccount for uncollectibles.<\/p>\n
a. Prepare the journal entry
\nneeded to write off Mattingly\u00e2\u0080\u0099s account.
\nb.
\nComment on the ability of the direct write-off method to value receivables on
\nthe year-end balance sheet.
\n7. Allowance method:
\nanalysis of receivables. At a January 20X2 meeting, the presi\u00c2\u00addent of Sonic
\nSound directed the sales staff \u00e2\u0080\u009cto move some product this year.\u00e2\u0080\u009d The president
\nnoted that the credit Assessment department was being disbanded be\u00c2\u00adcause it had
\nrestricted the company\u00e2\u0080\u0099s growth. Credit decisions would now be made by the
\nsales staff.
\nBy the end of the year,
\nSonic had generated significant gains in sales, and the president was very
\npleased. The following data were provided by the accounting department: <\/p>\n
20X2<\/p>\n
20X1<\/p>\n
Sales <\/p>\n
$23,987,000 <\/p>\n
$8,423,000 <\/p>\n
Accounts Receivable, 12\/31 <\/p>\n
12,444,000 <\/p>\n
1,056,000 <\/p>\n
Allowance for Uncollectible Accounts, 12\/31 <\/p>\n
? <\/p>\n
23,000 cr. <\/p>\n
The $12,444,000 receivables balance was aged as
\nfollows: <\/p>\n
Age of Receivable<\/p>\n
Amount<\/p>\n
Percentage of Accounts Expected to Be
\n Collected<\/p>\n
Under 31 days <\/p>\n
$4,321,000 <\/p>\n
99% <\/p>\n
31260 days <\/p>\n
4,890,000 <\/p>\n
90 <\/p>\n
61290 days <\/p>\n
1,067,000 <\/p>\n
80 <\/p>\n
Over 90 days <\/p>\n
2,166,000 <\/p>\n
60 <\/p>\n
Assume
\nthat no accounts were written off during 20X2.
\nInstructions<\/p>\n
a. Estimate
\nthe amount of Uncollectible Accounts as of December 31, 20X2.
\nb. What
\nis the company\u00e2\u0080\u0099s Uncollectible Accounts expense for 20X2?
\nc. Compute
\nthe net realizable value of Accounts Receivable at the end of 20X1 and 20X2.
\nd.
\nCompute the net realizable value at the
\nend of 20X1 and 20X2 as a percentage of respective year-end receivables
\nbalances. Analyze your findings and comment on the president\u00e2\u0080\u0099s decision to
\nclose the credit Assessment department.<\/p>\n","protected":false},"excerpt":{"rendered":"
Week 2 Assignment ACC 205 Date: 1. Recognition of concepts. Jim Armstrong operates a small company that books enter\u00c2\u00adtainers for theaters, parties, conventions, and so\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8827,10099,10540,10536,10892,10538,10539,10537,10891],"tags":[10549,10616,10615,7687,10627,8857,10552,10295,10548,10622,8907],"class_list":["post-130211","post","type-post","status-publish","format-standard","hentry","category-australia-essays","category-buy-essay","category-cheap-essay-writers","category-get-assignments-done","category-page-paper","category-phd-essay-writers","category-research-paper-writing-service-for-any-topic","category-study-bay-essay","category-write-my-assignment-ireland","tag-ai-plagiarism-free-essay-writing-tool","tag-australian-best-tutors","tag-best-trans-tutors","tag-buy-essay-uk","tag-cheap-dissertation-writer","tag-help-with-writing-an-essay","tag-help-write-my-paper-ai-free","tag-homework-for-you","tag-online-essay-writers","tag-phd-essays","tag-write-my-essay-for-me"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130211","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=130211"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130211\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=130211"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=130211"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=130211"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}