Week 3 Assignments - NEEL This is for you
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194 ACC201
LD2
LD3
CHECICRGURfS b. Net Income: 562.520
TotaIAssets: $157.520
5. Paid 54&,SOO c•.•b for opereting expen= 6. Adjusted accounts to recogniu uoeollectible accouatsexpense for 2012. Sharp estimates that
uncclleetible accounts expense will be I percent of sales on account.
Heq.ired Complete all the following requiremeots for 2012 and 2013. Complete all requirements for 2012 prior to beginning the requirements for 201 3.
a. Identify the type of each rransaetion (asser source, asset use, asset exchange, or claim. exchange).
b. Show the ~iJ'ect of each uan.actiOIl on the elements of tbe financial statements, using a hori- zontal statements model like the one shown bere. Use + for increase, - for decrease, and NA Cor not alTecred. Also, in the Cash Flow column, indicate whether the item is an operating acti>ity (OA). investing activity (lA). or financing activity (FA). The first transaction IS entered 3$ an example.
Un. + Equity Rev. ElqI. Hetlnc. Cash Row
NA NA NA++ +
e, Organize the transaction data in acecunts under an accounting equation. d. Prepare the income statement, statement of changes in stockholde rs• equity, balance meet.
aod statement of cash flows.
Problem 5-24 Dnomining accOIUIllHdturar. perrelli of "'Fe""e aJIoWflllte "",rltod of accolllltinl{ for lIIIcoIIectibk IltCOlIlID
The following information pertains to Leslie'S Root Store sales on account and accounts receivable.
Accounts receiVable balance. January 1. 2012 Allowance for doUbtful accounts. January 1. 2012 Sales 00 account 2012 . Cost of goods sold. 71112 Collectfons of accounts rec.Nabla, 2012
$52.500 4.125
925.000 615.000 835.000
After several collection attempts, Leslie's wrote otT 53,100 of accounts that could not be collected. Leslie's estimates that bad debts expense will be 05 percent of sales on account.
Hell·ired a. Compute the following amounts.
(I) Using the allowance method, the amount of uncollectible accounts expense for2012. (!) Net reaJizah~ value of receivables at the end of 2012.
b. Explain why the uncollectible accounts expense amount is diiJ'erent from tbe amount that was written of!' 3$ uneoll ecctible,
Problem 5-2S AccolllIIiIIg fo, IlIIcoIhctibk IlCCOIIW: perr:elll of receirtW/es a/lowtIIICII metItod
Hammond Inc. experienced the following transactions Cor 2012, its first year of operations:
I. Issued common stock forS80,OOO;:asb. 2. Purchased S225,OOO of ~rd\andise Ill! account. 3. Sold merchandise that cost 5148,000 for S294,OOO on account. 4. Collected 5142,000 cash from accouots receivable. S. Paid S110,000 00 accounts payable. 6. Paid 546,000 of salaries expense fot the year,
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Surveyor Amlt.nting. Third Erlition t--'==---
1. Paid other operating expenses of S35,OOO. 8. Hammond adjusted the aCCOUDI5using the foUowing information from an accounts reoeiv-
able aging schedule.
Hoa!Ibet ., Illtys Percltlt l.ikely 10 AllowllJlce PutOue Amoullt Se UneollfHItible 11I1_8
Current S33.000 .01 ~ 12.000 .n5 31-60 3,000 .10 61-90 2.500 10 Ovet90days 1.500 .5D
Required
a. Organize the transaction data in accounts under an accounting equation. b. Prepare the income statement, sunement of changes in stockbolders' equity, balance sheet,
and statement of cash 110"''' for Hammond Inc. for 2012. c. v,'hat is the net realizable value of the accounts receivable at December 31, 20121
ProbJem 5-26 De.termiNztion of IU't:DIIIfIlHZltmcu-pen:eRt of naiYabks LO 2 alIoWGIICf!. _tJrOd of fACCOtDIMt: for IUfCOlkctibk IZCCOIDlt'J
During the first year of operation, 2012, ~artin's Appliance recognized $192.000 of service CHECk FlGU E revenue on account. At the end of 2012, the accounts receivable balance was S57.400. Even c. Net Realizable Value 555.104 though this is his first year in business, the owner believes be will collect all but about 4 percent of tbe ending balance,
Required a. \\'hat amount of cash was collected by :'>lattin's during 201Z? b. Assuming the use of an allowance syst.!m [0 account ror uncollectible accounts, what amount
should Martin record as uncnll<clible accounts expense in 2012? c. What is the net real.ttable '-alut of reor:i>-al>L!sat the end of 20 I Z? d. Shaw the effect of tbe above transaetions on the financial staiemems by reeording the
appropriate amounts in a horizontal statements model like the one shown here. When you record amounts in the Cash Flow column. indicate whether the item is an operating activity (OA), investing activity (1A), or financing acti.;ty (FA). The !ttters :-IA indicate that an ele- ment is not affected by the event.
UIII. .p Equity 1ItV. e.p. Net •••c. Cash flowAssets Cash .p Ace ••• Rec. Allow.
Problem 5·21 Accounting for note» nceiPllble IIJIIi IUICOIlectibie IICctHUlt. lUiRg tile percetrt of SfJ/es tdIowtUlt:e metAod
The following transactions apply to Bialis Co. for 2012, iu fmt year of operations.
I. Issued SIOO,OOOof common stock fot cash, Z. Provided S86,OOO of services on account. 3. Collected 575,000 cash from accounts receivable. 4. Loaned StO,OOO 10 Horne Co. on October 1.2012. The note bad a one-year term to maturity
and an 8 percent interest 00"- 5. Paid $32,000 of salaries expense for the year. 6. Paid a S2,OOOdividend to the stockholders. 7. Recorded the accrued interest on December 31,20.12 (see ilenl4}. 8. Uncollectible accounts expense is estimated 10 be 1 percent of service revenue on account.
L02,4
CHECKRGUR£ b. Net Ineome 553,340
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ACC201
Rtoquired a, Show the eJrecu of the above transactions in a horizontal statements model like the one
shown below.
Evem
EvOtlt CosIo... Ace1$. Reo. ••. Notes Reo. ••. Inl Ree. = Cell\. StIc. ••. Rei. Earn. -Allow.'" ~
Doabtlul A.CIS. 1-- ----------11---- --]1
Assets Rev. - Exp. = Nellno. Cash Flews
L03,5
b. Prepare the income statement, balance sheet, and statement of cash flows for 2012.
Problem 5·28 Acco""tiRg for credit ctmI sales tUUI "ncoUectiJJle /lCCOUflts: percem of re.ceilliU>m a/lUl4'tl1Jce method
Bishop Supply Company had the following transactions in 2012:
l. Acquired S60,1lOOcash from the issue of common stock. 2. Purcha se d SI80,1lOO of merchandise for cash in 2012. 3. Sold merchandise that cost SI 10.000 fur 5200,000 during the year under the following terms:
~e CHECK AGUIIES b_ Net Income: SlS.700
Total Assets: $!r.I.760
S 50,000 140.000 10.000
CaSh sales Credit card salas iThe credit card company charges a 3 percent service fee_! Sales on account
4. Collected all of the aceounu receivable from tbt credit card company_ S. Collected 59.200 of a<XOW1l5 receivable. 6. Paid selling and aCministrati1le~ofS46.000_ 7. DettrmiDed that 5 percent of tbe ending accounts receivable. balance would be uncollectible,
Rc •••.••• a. Record the abo>-t evtnts in a horizontal st.ateJnetIts model like the rollov.ing one. \\-ben you
record amounts in the Cash Flov.· column. indicate ,,1Iether the item is an operating activity lOA}. III m.titingacti>ity (l'&'). or a financing acthity (FA)_ The lttkrs NA indicate thai an el<meot is oot affecteC by tbt ~L -~.
kcts. Cash ••. Rec. •••••AlloW ••. •••
••••. - ElIp. = Nollie.
b. Prepare an income statement. a $tatement of changes in stockholders' equity, a balance sheet, and a sta1eIIlez1tof cuII~ .•for 2012_
L01, 4. 5 Probl m 5-ZS Effect of trtDuactio/U 04 rite ekmem of jiMulcial st~ts Rtoqaifed
Identify each of tbe following independent transactioas as asset source (AS), asset use (AU). asset exchange CAE). or claims e:<cllange (eE). Also explain how each event affects assets, liaeilities, stockholders' equity, ""I income, and cash now by placing a - for increase, - for decrease, or NA for nOI alJ'e<!ted Utlder eaca of tbe caregodes The ftrSt t\'eIl1 is recorded as an example,
Type of bent Evem
AE
Assets
=I-:
Common UllbilillH Stock
NA NA
Retained Earnln,s
NA
Net Incom.
NA
Casll Flow
+