Exercise 8 - 13 13
Account Classification 1 -30 days 31 -60 days 61-90 days 91-120 days 121-180 days 181-360 days
Balance 500,000 200,000 150,000 100,000 75,000 50,000 1,075,000
% Doubtful 0.01 0.05 0.10 0.15 0.25 0.75
2 Required allowance for doubtful accounts Less: Credit balance For provision 3 Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense 4 Accounts Accounts Receivable Receivable Less: Allowance for Doubtful Accounts Net realizable value
Required Allowance 5,000 10,000 15,000 15,000 18,750 37,500 101,250 (1)
101,250 50,000 51,250 51,250 51,250
1,075,000 1,075,000 101,250 973,750
Exercise 8 - 12
Case A
Case B
Case C
Accounts Receivable, June 30, 2009 Add: Services rendered on account Total Less: Collections On prior period receivables On current period receivables Accounts Receivable, June 30, 2010 x Percentage Required allowance Less: Credit balance For adjustment/provision
421,850 724,600 1,146,450 125,000 340,200
465,200 681,250 0 68,125 33,748 34,377
Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense
34,377
Required allowance Less: Credit balance For adjustment/provision
57,500 33,748 23,752
Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense
23,752
Allowance for doubtful accounts, June 30, 2009 Accounts Receivable, June 30, 2009 Percentage Accounts Receivable, June 30,2010 x % of allowance Required allowance Less: Credit balance For adjustment/provision Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense
34,377
23,752
33,748 421,850 0.08 681,250 0.08 54,500 33,748 20,752 20,752 20,752
Exercise 8 - 11
1 Accounts receivable, June 30, 2010 x Percentage Required allowance Less: Credit balance For adjustment/provision Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense 2 Accounts receivable, June 30, 2010 x Percentage For adjustment/provision Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense 3 Accounts receivable, June 30, 2010 x Percentage For adjustment/provision Less: Credit balance For adjustment/provision Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense 4 Accounts receivable, June 30, 2010 x Percentage For adjustment/provision Less: Credit balance For adjustment/provision
Doubtful Accounts Expense Allowance for Doubtful Accounts Expense To set up doubtful accounts expense
140,600 0.04 5,624 4,700 924 924 924
162,100 0.03 4,863 4,863 4,863
157,350 0.06 9,441 1,700 7,741 7,741 7,741
100,500 0.10 10,050 7,700 2,350
2,350 2,350
Exercise 8 - 10
Additional Maintenance Equipment Scrap value Depreciable value Estimated useful life Annual depreciation Fractional year For adjustment/provision Depreciation Expense - Machinery Equipment Accumulated Depreciation - Machinery Maintenance Equipment Scrap value Depreciable value Estimated useful life For adjustment/provision Depreciation Expense - Machinery Equipment Accumulated Depreciation - Machinery
65,000 7,000 58,000 3 19,333 2/12 3,222.17 25,047.17 25,047.17 227,250 9,000 218,250 10 21,825 21,825 21,825
Property, Plant and Equipment Less: Accumulated Depreciation Net carrying value
292,250.00 25,047.17 267,202.83
3 Property, Plant and Equipment Less: Accumulated Depreciation Net carrying value
292,250.00 46,902.17 245,347.83
