Selected accounts from the (unadjusted) trial balance of the Rockport Music Thea

Question

Selected accounts from the (unadjusted) trial balance of the Rockport Music Theater are presented below as of December 31, 20x7. The theater prepares adjusting entries once a year, each December 31st. The straight-line depreciation method is used for all property, plant and equipment owned by the theater Rockport Music Theater (unadjusted) Trial Balance December 31, 20x7 Cash Accounts Receivable Allowance for Doubtful Accounts Notes Receivable Discount on Notes Receivable Prepaid Insurance Theater Furnishings (see item #3 on page 3) Accumulated Depreciation - Theater Furnishings Office Equipment Accumulated Depreciation - Office Equipment Accounts Payable Notes Payable Discount on Notes Payable Ticket Revenue Salary Expense 76,000 250,000 180 100,000 6,419 1,890 10,000 2,380 30,000 875,000 500 3,271 250,000 REQUIRED: Prepare appropriate adjusting entries on December 31, 20x7 based on the information below. 4 poi 1 ) A percentage (2%) of outstanding accounts receivable at year-end determined that the estimated uncollectible accounts as of December 31, 20x7 would be $5,000o

Explanation / Answer

Adjusting entry :

date accounts & explanation debit credit 20X7 dec 31 Bad debt expenses a/c (250000*2%-180) 4820 Allowance for doubtful accounts 4820 (TO record adjusting entry)

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