PROBLEM 9-1A (Continued)
(c) Balance before adjustment [see (b)] ……………………………… $ 19,000
$3,700,000–$50,000
$3,650,000
PROBLEM 9-2A
PROBLEM 9-3A
2017
(a) & (b)
Bad Debt Expense
Date
Explanation
Ref.
Debit
Credit
Balance
Allowance for Doubtful Accounts
Date
Explanation
Ref.
Debit
Credit
Balance
2017
(b) 2018
(1)
(2)
PROBLEM 9-4A
(a) Total estimated bad debts
Number of Days Outstanding
Total
0–30
31–60
61–90
91–120
Over 120
% uncollectible
(e) If Rigney Inc. used 4% of total accounts receivable rather than aging the
PROBLEM 9-5A
(a) The allowance method. Since the balance in the allowance for doubtful
accounts is given, they must be using this method because the account
would not exist if they were using the direct write-off method.
(b) (1) Dec. 31 Bad Debt Expense
(2) Dec. 31 Bad Debt Expense
(c) (1) Dec. 31 Bad Debt Expense
(2) Dec. 31 Bad Debt Expense ………………………. 9,700
(e) Bad Debt Expense …………………………………………….. 3,000
PROBLEM 9-6A
(a) Oct. 7 Accounts Receivable …………………………….. 6,900
15 Cash …………………………………………………….. 12,160
24 Accounts Receivable—Holt …………………… 9,105
(b)
Notes Receivable
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 9-6A (Continued)
Accounts Receivable
Date
Explanation
Ref.
Debit
Credit
Balance
Oct. 7
6,900
6,900
Interest Receivable
Date
Explanation
Ref.
Debit
Credit
Balance
Oct. 1
Balance
183
(c) Current assets
Notes receivable ……………………………………………………… $16,000
PROBLEM 9-7A
Jan. 5 Accounts Receivable—Sheldon Company ……… 20,000
Apr. 20 Cash ($20,000 + $400) …………………………………. 20,400
May 25 Notes Receivable ……………………………………….. 6,000
Accounts Receivable—Potter Inc. ………… 6,000
COMPREHENSIVE PROBLEM SOLUTION
(a)
Jan. 1
Notes Receivable …………………………………….
Accounts Receivable—
Merando Company …………………………
1,200
1,200
Allowance for Doubtful Accounts …………….
Inventory ………………………………………………..
17,200
17,200
Cost of Goods Sold …………………………………
Inventory …………………………………………
19,600
19,600
17
Cash …………………………..………………………….
Accounts Receivable ………………………..
22,900
22,900
21
Accounts Payable …………………………………..
Cash ………………………………………………..
14,300
14,300
Cash …………………………..………………………….
27
Supplies …………………………………………………
Cash ………………………………………………..
Cash ………………………………………………..
COMPREHENSIVE PROBLEM SOLUTION (Continued)
Adjusting Entries
Jan. 31
Supplies Expense ……………………………………
Interest Receivable ………………………………….
8
(b) WINTER COMPANY
Adjusted Trial Balance
January 31, 2017
Debit
Credit
Cash ……………………………………………………
$17,832
Notes Receivable …………………………………
1,200
Accounts Receivable …………………………...
Allowance for Doubtful Accounts ………….
Interest Receivable …………………………..….
Inventory ……………………………………………..
Supplies ………………………………………………
Accounts Payable ………………………………..
32,730
Sales Revenue ……………………………………..
29,000
Cost of Goods Sold ………………………………
Supplies Expense ………………………………..
Bad Debt Expense………………………………..
1,027
Other Operating Expenses ……………………
Interest Revenue ………………………………….
$74,765
COMPREHENSIVE PROBLEM SOLUTION (Continued)
(b) Optional T accounts for accounts with multiple transactions
Cash
1/31 Bal. 17,832
1/27 1,400
1/31 840
1/1 Bal. 13,100
1/21 14,300
Accounts Receivable
1/24 280
1/17 22,900
1/11 28,000
1/15 1,000
1/31 Bal. 29,000
1/1 Bal. 19,780
1/1 1,200
Allowance for Doubtful Accounts
1/3 730
1/1 Bal. 9,400
1/11 19,600
1/31 Bal. 6,300
1/31 Bal. 20,300
1/1 Bal. 800
Supplies
Accounts Payable
1/21 14,300
1/1 Bal. 8,750
1/8 17,200
1/31 Bal. 11,650
COMPREHENSIVE PROBLEM SOLUTION (Continued)
(c) WINTER COMPANY
Income Statement
For the Month Ending January 31, 2017
Sales revenue …………………………..………………
$29,000
Cost of goods sold ……………………………………
20,300
Gross profit ……………………………………………..
Operating expenses ………………………………….
Other operating expenses …………………..
Bad debt expense ………………………………
Supplies expense ………………………………
Service charge expense ……………………..
Total operating expenses ………………………….
Income from operations …………………………...
Other revenues and gains …………………………
Interest revenue …………………………………
Net Income……………………………………………….
COMPREHENSIVE PROBLEM SOLUTION (Continued)
WINTER COMPANY
Owner’s Equity Statement
For the Month Ending January 31, 2017
Owner’s Capital, January 1 ………………………………………..
$32,730
Add: Net income ……………………………………………………….
Owner’s Capital, January 31 ………………………………………
WINTER COMPANY
Balance Sheet
January 31, 2017
Assets
Current assets
Cash …………………………..………………………
$17,832
Notes receivable ………………………………….
Accounts receivable …………………………..
Interest receivable ……………………………….
Inventory …………………………………………….
Supplies ……………………………………………..
Total assets ……………………………………………….
Liabilities and Owner’s Equity
Current liabilities
Accounts payable ………………………………..
$ 11,650
Owner’s equity
Owner’s capital ……………………………………
Total liabilities and owner’s equity ………………