ACC 291 Week 2 Individual Study Guide Accounting Problems
TUTORIAL: Includes solutions to accounting problems.
Individual Assignment: Accounting Problems
The ledger of Hixson Company at the end of the current year shows Accounts Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.
• If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is uncollectible.
• If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.
• If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.
Information related to plant assets, natural resources, and intangibles at the end of 20XX for Spain Company is as follows: buildings $1,100,000; accumulated depreciation-buildings $650,000; goodwill $410,000; coal mine $500,000; accumulated depletion-coal mine $108,000. Complete the partial balance sheet of Spain Company for these items.
Match the statement with the term most directly associated with it.
• Intangible assets
• Research and development costs
Presented below are selected transactions at Ingles Company for 20XX.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 2001. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value. (Assume depreciation is up to date as of December 31, 2010.)
June 30 Sold a computer that was purchased on January 1, 2008. The computer cost $40,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ingles Company uses straight-line depreciation.
Beka Company owns equipment that cost $50,000 when purchased on January 1, 2008. It has been depreciated using the straight-line method based on estimated salvage value of $5,000 and an estimated useful life of 5 years.
Prepare Beka Company’s journal entries to record the sale of the equipment in these four independent situations.
Sold for $28,000 on January 1, 20XX
Sold for $28,000 on May 1, 20XX.
Sold for $11,000 on January 1, 20XX.
Sold for $11,000 on October 1, 20XX.
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