Prepare the adjusting entry needed for hi-tech, Accounting Basics

Scenario

Sara Jones opened a technical consulting business called Hi-Tech For the Future earlier in the year. So far, she has been successful in providing services and selling ancillary products to clients.

Before the first advisory board meeting for the year, she realized that she needed to be better prepared in terms of reporting the financial status of the organization. Luckily, with your assistance, she was able to have valuable accounting information readily available for both internal and external reporting purposes. Now, as the company continues to grow, she is realizing that she needs to begin accounting for bad debts. Furthermore, her partners have introduced additional concerns.

Your Role/Assignment

You are still on board as an accounting consultant for Hi-Tech For the Future. Sara has tasked you with reviewing information and completing a few accounting items. Using the information provided, you will need to complete the assignment found in the Activity section of this week's You Decide tab.

Activity

You are still on board as an accounting consultant for Hi-Tech For the Future. Sara has tasked you with reviewing the following information and completing a the following accounting items:

Assume that Hi-Tech For the Future has total revenues of $43,853 during the first three months of 2010 and that the Accounts Receivable balance on March 31, 2010 is $22,720.

1. Prepare the adjusting entry needed for Hi-Tech to recognize bad debts expense on March 31, 2010 under each of the following independent assumptions (assuming a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31).
a. bad debts are estimated to be 1% of total revenues.
b. bad debts are estimated to be 2% of accounts receivable.

2. Assume that Hi-Tech's Accounts Receivable balance at June 30 is $20,250 and that one account of $100 has been written off against the Allowance for Doubtful Accounts since March 31. If Sara uses the method under 1b, what adjusting journal entry must be made to recognize bad debts expense on June 30?

In addition to these tasks, you will need to address any concerns presented by Sara's partners.

Posted Date: 2/20/2013 12:02:03 AM | Location : United States







Related Discussions:- Prepare the adjusting entry needed for hi-tech, Assignment Help, Ask Question on Prepare the adjusting entry needed for hi-tech, Get Answer, Expert's Help, Prepare the adjusting entry needed for hi-tech Discussions

Write discussion on Prepare the adjusting entry needed for hi-tech
Your posts are moderated
Related Questions
You recently landed your dream job working for the state as an accountant. You are given the task to research several state and local governmental financial accounting issues. F

can a buyer still avail the 2% discount if he/she partially paid the accounts receivable at the 5th day and the full payment is on the 10th day of the given discount period in th

Q. Steps used in retail inventory method? The retail inventory method approximation the cost of the ending inventory by applying a cost/retail price ratio to ending inventory s

The 31st December 2009 trial balance of Anika Co. reported the following information. Dr. Cr. Allowance for Bad Debts........................... $2,300 During the year 2010 t

The following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Code has b


Q. Misstatement of accounting information? The FASB describes materiality as the magnitude of an omission or misstatement of accounting information that in the light of surroun

Question Social accounting is a way of calculating and reporting on an organisation's ethical and social performance. It is principally concerned with offering a complementary

The CPSdata to re-estimate the difference among average male and female pay. Use for example, the regression LS LNWAGE C FE a.  Can you avoid the hypothesis that mean female

Based on the financial statements for Jackson Enterprises (income statement, statement of owner's equity, and balance sheet) shown below, prepare the following financial ratios.