Business Administration 2257 Study Guide - Midterm Guide: Deferred Income, List Of The Shield Episodes, Flight Controller
2 Jun 2018
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ACCOUNTS RECEIVABLE
A4DA - contra asset; credit balance
Writing off a bad debt: Dr A4DA, Cr A/R
Recovery: Dr A/R, Cr A4DA; Dr Cash, Cr A/R
Adjusting entry (end of period):
1. Calculate trial balance of A4DA
2. Calculate ending balance of A4DA
E/B = Estimated % x E/B A/R
3. Calculate Bad Debt Expense
BDE = E/B A4DA – T/B A4DA
4. Dr Bad Debt Expense, Cr A4DA
*N/R has to be changed to A/R before writing off
MISCELLANEOUS
Loss on sale:
Dr Cash, Dr A/D – Old Asset, Dr Loss on Sale/Cr Gain on
Sale, Cr Old Asset
Loss on trade-in:
Dr A/D – Old Asset, Dr Loss on Trade-in, Dr New Asset, Cr
Old Asset, Cr Cash (if a portion was paid for with cash)
Clearing wages payable from last year:
Dr Wages Payable, Cr Cash
Paid on the first of the oth for last oth’s work:
Dr Wages Expense, Cr Wages Payable, Cr Cash
Paying bank loan:
Dr Bank Loan, Dr Interest Expense, Cr Cash
*Include long-term and current portion of bank loan
Clearing income tax payable from last year:
Dr Income Tax Payable, Cr Cash
Closing entry for income tax:
Dr Income Tax Expense, Cr Income Tax Payable
Dr Income Summary, Cr Income Tax Expense
Recording entries from bank reconciliation:
Dr Service Charge Expense (bank service fee), Dr A/R (NSF
fee payable by customer), Cr Cash
INCOME STATEMENT
For the period ending August 31, 2008
Revenue
Gross sales 1,869,687
Less: Sales discounts 2,240
Less: Sales returns & allowances 2,283 (4,523)
Net Sales 1,865,164
Less: Cost of goods sold expense (926,662)
Gross Profit 938,502
Less: Operating Expenses
Depreciation 54,768
Repairs 950
Sales salaries 54,000
Operator wages 120,000
Secretary salary 40,000
CEO salary 120,000
Telephone 583
Internet 980
Office supplies 290
Promotion 500
Service charges 180
Bad debt expense 983 (393,234)
Other Revenue:
Interest revenue 1,093
Other Expenses:
Interest Expense (6,540)
Loss on trade-in (129)
Net income before tax 539,692
Less: Income tax expense (161,908)
Net Income After Tax 377,784
STATEMENT OF FINANCIAL POSITION
As at August 31, 2008
ASSETS
Current assets:
Cash 391,845
Accounts receivable 38,317
Less: A4DA 1,533 36,784
Inventory 122,524
Interest receivable 25
Office supplies 40
Notes receivable 6,020
Total current assets 557,238
Long-lived assets:
Building 310,000
Less: A/D 28,500 281,500
Vending Machines 426,750
Less: A/D 63,207 363,543
Office Equipment 18,200
Less: A/D 3,367 14,833
Total long-lived assets 659,876
Total Assets 1,217,114
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable 75,516
Salaries payable 14,500
Current portion of bank loan 12,000
Unearned revenue 1,800
Income tax payable 161,908
Total current liabilities 265,724
Bank loan 174,000
Total liabilities 439,724
Shaeholde’s euity:
Common stock 300,000
Retained earnings 477,390 777,390
Total Liabilities ad Shaeholde’s Euity 1,217,114
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Document Summary
Writing off a bad debt: dr a4da, cr a/r. Recovery: dr a/r, cr a4da; dr cash, cr a/r. Adjusting entry (end of period): calculate trial balance of a4da, calculate ending balance of a4da. E/b = estimated % x e/b a/r: calculate bad debt expense. Bde = e/b a4da t/b a4da: dr bad debt expense, cr a4da. *n/r has to be changed to a/r before writing off. Dr cash, dr a/d old asset, dr loss on sale/cr gain on. Dr a/d old asset, dr loss on trade-in, dr new asset, cr. Old asset, cr cash (if a portion was paid for with cash) Paid on the first of the (cid:373)o(cid:374)th for last (cid:373)o(cid:374)th"s work: Dr wages expense, cr wages payable, cr cash. Dr bank loan, dr interest expense, cr cash. *include long-term and current portion of bank loan. Dr income tax expense, cr income tax payable.
