Prepare an answer sheet with the column headings shown here. For each of the following transactions or

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Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (−). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases only one column may be affected because all of the specific accounts affected by the transaction are included in that category.

Prepare an answer sheet with the column headings shown here.

b. Recorded estimated bad debts in the amount of $1,400.
c. Wrote off an overdue account receivable of $1,040.
d. Converted a customer's $2,400 overdue account receivable into a note.
e. Accrued $96 of interest earned on the note (in d ).
f. Collected the accrued interest (in e ).
g. Recorded $8,000 of sales, 70% of which were on account.
h. Recognized cost of goods sold in the amount of $6,400.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Accounting What the Numbers Mean

ISBN: 978-1259535314

11th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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