Reference no: EM131330741
Assignment
1. Benzton Inc.had sales of $1,200,000 during 2015. Twenty-five percent of these were cash sales. In addition to the 2015 cash sales, $569,400 of the 2015 credit sales were collected during the year. $30,000 of accounts receivable were written off as being uncollectible during 2015. The December 31, 2014 Allowance for Doubtful Accounts was $16,400 credit balance. Also, the December 31, 2014 balance in the general ledger accounts receivable was $286,500; all of which was collected during 2015. In addition, $16,400 of the accounts that were written off during 2014 were unexpectedly collected during 2015. On December 31, 2015 Benzton completed an accounts receivable aging schedule. The following schedule provides the percent of the total accounts receivable by the category number of days
|
Category Age (days)
|
Accounts Receivable Percentage
|
|
1-30
|
40
|
|
31-60
|
20
|
|
61-90
|
10
|
|
91-120
|
24
|
|
Over 120
|
6
|
|
Total
|
100
|
NOTE: You will need to determine the accounts receivable December 31, 2015 balance and then you multiply the total accounts receivable amount by the above percentages.
Also, Benzton, based on 5 years of historical data, estimated the following percentages for each category that would be uncollectible at December 31, 2015:
|
Category Age (days)
|
Estimated Loss percentage
|
|
1-30
|
2.5%
|
|
31-60
|
3.0%
|
|
61-90
|
4.25%
|
|
91-120
|
9%
|
|
Over 120
|
45%
|
Required: NOTE: WHEN APPLICABLE ROUND ALL CALCULATIONS AND FINAL ANSWERS TO THE NEAREST WHOLE DOLLAR!
1) Prepare journal entries to record the following 2015 transactions:
a. The write-off of $30,000
b. The recovery of $16,400
2) Recalculate the balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2015.
3) Prepare the doubtful account adjusting entry to be recorded on December 31, 2015 for the accounts receivable that are estimated to be written-off during 2016.
2. A company had the following bank reconciliation at June 30, 2016:
Balance per bank statement, 6/30/16 $151,125
Add deposit in transit 33,475
184,600
Less outstanding checks 40,950
Balance per books, 6/30/16 $143,650
Data per bank for the month of July2016 follow:
Deposits$189,800
Disbursements $161,525
All reconciling items at June 30, 2016, cleared the bank in July. Outstanding checks at July 31, 2016, totaled $22,750. There were no deposits in transit at July 31, 2016. What is the cash balance per books at July 31, 2016?
3. A company had a beginning accounts receivable balance of $62,000, had cash receipts from customers of $650,000 and an ending accounts receivable balance of $70,000. What is the amount for sales?
4. Dentz Inc. worksheet for the preparation of its 2016 statement of cash flows included the following:
|
|
2016
|
|
|
December 31
|
January 1
|
|
Accounts receivable
|
$36,000
|
$28,125
|
|
Allowance for uncollectible accounts
|
1,238
|
990
|
|
Prepaid rent expense
|
10,148
|
15,345
|
|
Accounts payable
|
22,688
|
24,008
|
Dentz's 2016 net income is $185,625. What amount should Dentz include as net cash provided by operating activities in the statement of cash flows?
5. ABC Co. borrowed $750,000 on January 1, 2010 to purchase new machines. The interest rate of 8% is compounded semiannually to be repaid January 1, 2020. To repay this ABC will start making six equal annual deposits into fund that earns 6% annum on January 1, 2014.
Required:
What is the amount of the six annual deposits that ABC needs to make?
6. Determine the market price of a $2,000,000, nine-year, 9% (pays interest semiannually) bond issue sold to yield an effective interest rate of 10%.