ACCT1501 Lecture Notes - Lecture 8: Subledger, Debits And Credits, General Ledger

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bluebee342

22 Jul 2018

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Lo1 describe the purpose of the contra account of allowance for doubtful debts. Recap: accounts receivable: current asset on balance sheet, accounts receivable are recognized but uncollected revenue, created by the accrual accounting system, arise from sale of goods and/or services on credit. : when payment is made (cash received) Cr accounts receivable (-a) : also known as debtors, trade debtors, trade receivables. 83,500 * 5% (4,175) -> allowance for doubtful debts. Lower of cost or net realizable value: write-off (bankrupt, materialised, allowance for doubtful debts (estimate given by the management) Allowance for doubtful debts (current assets: property, plant and equipment (ppe) This is an estimate, wait and see what will actually happen. Lo2 prepare journal entries for writing off bad debts and the allowance for doubtful debts. Two methods: direct write-off method (not very commonly used, only in small business and being confidant)

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Question 34 pts

Which account would we debit to open a new petty cash fund?

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Our company established a petty cash fund with a balance of $200. We have petty cash receipts for travel expenses that total $125. We have counted petty cash and found that we were $2 short. Which of the following would be included in the entry to replenish the fund?

a credit to petty cash for $127

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On a bank reconciliation, which of the following will not appear as a deduction on a bank statement?

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Question 64 pts

Our company received a bank statement with a balance of $10,000. The reconciling items include outstanding checks that totaled $2,000 and a deposit in transit of $1,000. What is the adjusted bank balance after we complete the bank reconciliation?

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Question 74 pts

Our company has decided to write off an uncollectible account of $3,000. What account would we credit to record bad debt expense if our company uses the direct write-off method for bad debts?

bad debt expense

accounts receivable

allowance for doubtful accounts

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Question 84 pts

Where does allowance for doubtful accounts appear on our financial statements?

on balance sheet as a current liability

on income statement as part of cost of goods sold

on balance sheet as a contra asset related to accounts receivable

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Question 94 pts

At the end of 2018, we have a credit balance of $10,000 in allowance for doubtful accounts before the adjusting entry for bad debts expense. The company uses the percentage of sales method to estimate bad debt expense. The company estimates that 3% of net credit sales will be uncollectible for the year. Net credit sales for the year amounted to $1,000,000. What account and amount would we debit to record the adjusting entry for bad debt expense?

bad debt expense, $30,000

allowance for doubtful accounts, $30,000

bad debt expense, $20,000

accounts receivable, $20,000

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Question 104 pts

On July 1, 2017, our company accepts a 9-month 5% note for $12,000. What account and amount would we debit when we record the year-end adjusting entry on December 31, 2017?

interest revenue, $300

interest revenue, $350

interest receivable, $300

interest receivable, $350

sangriadonkey143

urgent need an hour will rate

Journalize the entries to record the following selected bond investment transactions for Southwest Bank: Refer to the Chart of Accounts for exact wording of account titles.

Apr. 1	Purchased $400,000 of Daytona Beach 4.5% bonds at 100 plus accrued interest of $4,500.
July 1	Received the first semiannual interest.
Sept. 1	Sold $250,000 of the bonds at 97, plus accrued interest of $1,875.

Chart Of Accounts

CHART OF ACCOUNTS

Southwest Bank

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
121	Allowance for Doubtful Accounts
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
151	Supplies
152	Prepaid Insurance
161	Investments-Daytona Beach Bonds
165	Valuation Allowance for Trading Investments
166	Valuation Allowance for Available-for-Sale Investments
181	Land
191	Equipment
192	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
231	Interest Payable
241	Salaries Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Treasury Stock
332	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Unrealized Gain (Loss) on Available-for-Sale Investments
353	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
611	Interest Revenue
612	Dividend Revenue
631	Gain on Sale of Investments
641	Unrealized Gain on Trading Investments

	EXPENSES
511	Cost of Merchandise Sold
512	Bad Debt Expense
522	Salaries Expense
531	Advertising Expense
532	Rent Expense
533	Insurance Expense
534	Supplies Expense
561	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense
731	Loss on Sale of Investments
741	Unrealized Loss on Trading Investments

General Journal

Journalize each of the entries to record the selected bond investment transactions for Southwest Bank. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10

tealtortoise284

Journalize the entries to record the following selected bond investment transactions for Hall Trust (refer to the Chart of Accounts for exact wording of account titles):

Apr.	1	Purchased for cash $378,000 of Oates City 3% bonds at 100 plus accrued interest of $2,835.
June	30	Received first semiannual interest payment.
July	31	Sold $152,400 of the bonds at 95 plus accrued interest of $381.

CHART OF ACCOUNTS

Hall Trust

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
121	Allowance for Doubtful Accounts
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
161	Investments-Oates City Bonds
165	Valuation Allowance for Trading Investments
166	Valuation Allowance for Available-for-Sale Investments
181	Land
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
231	Interest Payable
241	Salaries Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Treasury Stock
332	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
350	Unrealized Gain (Loss) on Available-for-Sale Investments
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
611	Interest Revenue
612	Dividend Revenue
631	Gain on Sale of Investments
641	Unrealized Gain on Trading Investments

	EXPENSES
511	Cost of Merchandise Sold
512	Bad Debt Expense
516	Cash Short and Over
520	Salaries Expense
531	Advertising Expense
534	Selling Expenses
535	Rent Expense
537	Office Supplies Expense
562	Depreciation Expense-Office Equipment
590	Miscellaneous Expense
710	Interest Expense
731	Loss on Sale of Investments
741	Unrealized Loss on Trading Investments

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10

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ACCT1501 Lecture Notes - Lecture 8: Subledger, Debits And Credits, General Ledger

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