) (d Journalize the following adjustments. (Credit account titles are automatica
ID: 2595306 • Letter: #
Question
) (d Journalize the following adjustments. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 1,525.) (1) (2) Services performed for customers through February 27, 2017, but unbilled and uncollected were $2,810 Received notice that a customer who was billed $130 for services performed February 10 has filed for bankruptcy. Clean Sweep does not expect to collect any portion of this (3) (4) (5) (6) (7) (8) (9) (10) outstanding receivable Clean Sweep uses the allowance method to estimate bad debts. Clean Sweep estimates that 3% of its month-end receivables will not be collected Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $400 salvage value Record 1 month of insurance expense An inventory count shows $300 of supplies on hand at February 28 One week of services were performed for the customer who paid in advance on February 17. Accrue for wages owed through February 28, 2017 Accrue for interest expense for 1 month. Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to "income before taxes" to help with the income tax calculation.) No. Account Titles and Explanation Debit Credit 1. Receiva ble Service Revenue 2. ance for Doubtful Accounts nts Receivable 3. Bad Debt ExpenseExplanation / Answer
Workings:
1.
Month-end receivables = $4220 - $130 = $4090
Estimated uncollectible accounts = 3% x $4090 = $122.70 = $123
Current balance in allowance for doubtful accounts = $130 debit
Adjusting entry required = $130 + $123 = $253
2.
No. Account Titles and Explanation Debit Credit 1 Accounts receivable 2810 Service revenue 2810 (To record unbilled services) 2 Allowance for doubtful accounts 130 Accounts receivable 130 (To record write-off of uncollectible accounts) 3 Bad debt expense 253 Allowance for doubtful accounts 253 (To record bad debt expense) 4 Depreciation expense [($3280 - $400)/4 x 1/12) 60 Accumulated depreciation-equipment 60 (To record depreciation on equipment) 5 Insurance expense ($2460 x 1/3) 820 Prepaid insurance 820 (To record insurance expense) 6 Supplies expense ($730 - $300) 430 Supplies 430 (To record supplies expense) 7 Unearned service revenue 108 Service revenue ($432 x 1/4) 108 (To record service revenue earned) 8 Salaries and wages expense (4 x $360 x 1 week) 1440 Salaries and wages payable 1440 (To accrue salaries and wages) 9 Interest expense ($6000 x 6% x 1/12) 30 Interest payable 30 (To accrue interest on note payable) 10 Income tax expense ($2445 x 20%) 489 Income tax payable 489 (To record income tax expense)Related Questions
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