ezto.mheducatio Dashboard Final Exam Elilte Events Corporation has provided even
ID: 2591891 • Letter: E
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ezto.mheducatio Dashboard Final Exam Elilte Events Corporation has provided event planning services for several years. The company uses the percentage of credit sales method to estimate bad debts for internal monthly reporting purposes. At the end of each quarter, the company adjusts its records using the aging of accounts recelvable method. The company entered into the following partial ist of transactions during the first quarter a. During January, the company provided services for $350,000 on credit b. On January 31, the company estimated bad debts using 2 percent of credit sales. c. On February 4, the company collected $300,000 of accounts recelvable. d. On February 15, the company wrote off a $3,500 account recelvable. e. During February, the company provided services for $300,000 on credit. f On February 28, the company estimated bad debts using 2 percent of credit sales g. On March 1, the company loaned $20,000 to an employee who signed a 6% note, due in 9 months. h. On March 15, the company collected $3,500 on the account written off one month earlier L. On March 31, the company accrued interest earned on the note. J On March 31, the company adjusted for uncollectible accounts, based on the following aging analyis. Allowance for Doubtful Accounts has an unadjusted credit balance of $9,500. Number of Days Unpaid Customer Total 31-6061-90 Over 90 0-30 s 2.400 $ 1.200 $ 1200 Aerosmith Biggle Small Others (not shown to save space) 101,000 39,500 2,400 s 1200 1,200 42.500,500 9,500 zZ Top 7500 7500 Total Accounts Recelvable Estimated uncollectible (%) $ 113,300 $48,200 $43,700 $ 10,700 $10,700 35% 3% 15% 25% value: 10.00 points Required 1. For items (a)-0. analyze the amount and direction (+ or-) of effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to account balances with a minus sign.) LiabilitiesExplanation / Answer
Answer 1. Assets = Liabilities + Stockholders' Equity a. Accounts Receivable 350,000.00 Retained Earnings 350,000.00 b. Allowance for Doubtful Accounts (7,000.00) Retained Earnings (7,000.00) c. Cash 300,000.00 Accounts Receivable (300,000.00) d. Accounts Receivable (3,500.00) Allowance for Doubtful Accounts 3,500.00 e. Accounts Receivable 300,000.00 Retained Earnings 300,000.00 f. Allowance for Doubtful Accounts (6,000.00) Retained Earnings (6,000.00) g. Notes Receivable 20,000.00 Cash (20,000.00) h-1. Accounts Receivable 35,000.00 Allowance for Doubtful Accounts (3,500.00) h-2 Cash 3,500.00 Accounts Receivable (3,500.00) i. Interest Receivable 100.00 Retained Earnings 100.00 j. Allowance for Doubtful Accounts (4,921.00) Retained Earnings (4,921.00) Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Accounts Receivable Dr. 350,000.00 To Service Revenue 350,000.00 (Record the Services provided to customers) b. Bad Debts Expenses Dr. 7,000.00 To Allowance for Doubtful Accounts 7,000.00 (record the Bad Debt Expenses) c. Cash Dr. 300,000.00 To Accounts Receivable 300,000.00 (Record the cash recd from customers) d. Allowance for Doubtful Accounts Dr. 3,500.00 To Accounts Receivable 3,500.00 (Record the Accounts Receivable W/o) e. Accounts Receivable Dr. 300,000.00 To Service Revenue 300,000.00 (Record the Services provided to customers) f. Bad Debts Expenses Dr. 6,000.00 To Allowance for Doubtful Accounts 6,000.00 (record the Bad Debt Expenses) g. Notes Receivable Dr. 20,000.00 To Cash 20,000.00 (Record the loan given to employee) h-1. Accounts Receivable Dr. 3,500.00 To Allowance for Doubtful Accounts 3,500.00 (Record the accounts receivable reinstated) h-2. Cash Dr. 3,500.00 To Accounts Receivable 3,500.00 (Record the cash recd from customers) i. Interest Receivable Dr. 100.00 To Interest Revenue 100.00 (record the interest accrued on Note) j. Bad Debts Expenses Dr. 4,921.00 To Allowance for Doubtful Accounts 4,921.00 (record the Bad Debt Expenses) Total Number of Days Unpaid 0-30 31-60 60-90 Over 90 Total Accounts Receivable 113,300 48,200 43,700 10,700 10,700 Estimated Uncollectible (%) 3% 15% 25% 0 Amount Uncollectible 14,421 1,446 6,555 2,675 3,745 Bad Debt Expneses - Adjutment Required = $14,421 - $9,500 = $4,921 Answer 3. Elite Events Corporation Balance Sheet (Partial) At March 31 Assets Current Assets Accounts Receivable 113,300 Less: Allowance for Doubtful Accounts (14,421) Net Accounts Receivable 98,879 Notes Receivable 20,000 Interest Receivable - Note 100 Answer 4. Elite Events would Report: Bad Debt Expenses Before Income from Operations Interest Revenue After Income from Operations
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