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

Assignment Help:

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.


Related Discussions:- Prepare the adjusting entry needed for hi-tech

A vendor reduces an item listed at $140 on july 1st by 20%, A vendor reduce...

A vendor reduces an item listed at $140 on July 1st by 20%, and then reduces it another 25% on September 1st. What is the sale price of the good after the last reduction? A. $7

Explain about staff accountant, Q. Explain about Staff accountant? Let ...

Q. Explain about Staff accountant? Let us travel with Tracy as she begins her career at the staff level. At the onset, she works directly under a senior accountant on each of h

What is depreciation, Q. What is Depreciation? Depreciation -- an expen...

Q. What is Depreciation? Depreciation -- an expense which is supposed to reflect the loss in value of a fixed asset. Forinstance if a machine will entirely wear out after ten y

Account and rules of debit and credit, A business may perhaps engage in tho...

A business may perhaps engage in thousands of transactions during a year. An accountant summarizes and classifies the data in these transactions to create useful information.

Explain about sales account, Q. Explain about Sales account? In theory ...

Q. Explain about Sales account? In theory sellers could record both sales allowances and sales returns as debits to the Sales account for the reason that they cancel part of th

Benefits of purchases discounts, Benefits of Purchases Discounts Purch...

Benefits of Purchases Discounts Purchases Discounts account is used to record discounts given for prompt payment. To prove ACCOUNTS PAYABLE LEDGER , you will look at bala

Calculate the profit using balance sheet, Part 1 (a) Name and describe ...

Part 1 (a) Name and describe the three concepts that form the basis of double entry bookkeeping, and explain how they form the basis of double entry bookkeeping. (b) How doe

Cycle inventory is required , One or more phases in the operation cannot su...

One or more phases in the operation cannot supply all the items it makes concurrently.

Balancesheet derivation question, Assignment Comments –    Debt-to-assets...

Assignment Comments –    Debt-to-assets ratio: 50% Current Ratio: 1.8x Total assets turnover: 1.5x       Days sales outstanding: 36.5 days* Gross profit margin

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd