Chp 7A HW 3 6.68 points eBook Print References Saved During the first year of operation,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Chp 7A HW 3 6.68 points eBook Print References Saved During the first year of operation, Year 1, Direct Service Company recognized $364,000 of service revenue on account. At the end of Year 1, the accounts receivable balance was $71,553. For this first year in business, the owner believes uncollectible accounts expense will be about 8 percent of sales on account. Required a. What amount of cash did Direct Service collect from accounts receivable during Year 1? b. Assuming Direct Service uses the allowance method to account for uncollectible accounts, what amount should Direct Service record as uncollectible accounts expense for Year 1? c. Prepare the general journal entries to: (1) Record service revenue on account. (2) Record collections from accounts receivable. (3) Record the entry to recognize uncollectible accounts expense. d. What is the net realizable value of receivables at the end of Year 1? e. Show the effects of the transactions in Requirement c on the financial statements by recording the appropriate amounts in a horizontal statements model. When you record amounts in the Statement of Cash Flows column, indicate whether the item is an operating activity (CA), investing activity (IA), or financing activity (FA). Leave the cell blank to indicate that an element is not affected by the event. Complete this question by entering your answers in the tabs below. Req A and B Req C Req D Req E Show the effects of the transactions in Requirement c on the financial statements by recording the appropriate amounts in a horizontal statements model. When you record amounts in the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Leave the cell blank to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) Event Assets DIRECT SERVICE COMPANY Horizontal Statement Model Balance Sheet Income Statement = Liabilities + Stockholders' Equity Retained Earnings Statement of Cash Revenue Expenses = Net Income Flows NRV Cash + Accounts Receivable 1. 2. + 3. + Totals 0+ 0 = 0+ 0 0 Show less A Chp 7A HW 3 6.68 points eBook Print References Saved During the first year of operation, Year 1, Direct Service Company recognized $364,000 of service revenue on account. At the end of Year 1, the accounts receivable balance was $71,553. For this first year in business, the owner believes uncollectible accounts expense will be about 8 percent of sales on account. Required a. What amount of cash did Direct Service collect from accounts receivable during Year 1? b. Assuming Direct Service uses the allowance method to account for uncollectible accounts, what amount should Direct Service record as uncollectible accounts expense for Year 1? c. Prepare the general journal entries to: (1) Record service revenue on account. (2) Record collections from accounts receivable. (3) Record the entry to recognize uncollectible accounts expense. d. What is the net realizable value of receivables at the end of Year 1? e. Show the effects of the transactions in Requirement c on the financial statements by recording the appropriate amounts in a horizontal statements model. When you record amounts in the Statement of Cash Flows column, indicate whether the item is an operating activity (CA), investing activity (IA), or financing activity (FA). Leave the cell blank to indicate that an element is not affected by the event. Complete this question by entering your answers in the tabs below. Req A and B Req C Req D Req E Show the effects of the transactions in Requirement c on the financial statements by recording the appropriate amounts in a horizontal statements model. When you record amounts in the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Leave the cell blank to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) Event Assets DIRECT SERVICE COMPANY Horizontal Statement Model Balance Sheet Income Statement = Liabilities + Stockholders' Equity Retained Earnings Statement of Cash Revenue Expenses = Net Income Flows NRV Cash + Accounts Receivable 1. 2. + 3. + Totals 0+ 0 = 0+ 0 0 Show less A
Expert Answer:
Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
Posted Date:
Students also viewed these accounting questions
-
During the first year of operation, 2013, Custom Appliance Co. recognized $320,000 of service revenue on account. At the end of 2013, the accounts receivable balance was $47,000. For this first year...
-
During the first year of operation, 2014, Clayton Repair Co. recognized $500,000 of service revenue on account. At the end of 2014, the accounts receivable balance was $72,000. For this first year in...
-
When the government allows private firms to extract minerals offshore or on public lands, two common means of sharing in the profits are bonus bidding and production royalties. The former awards the...
-
Peppertree Rentals, Inc.'s, unadjusted and adjusted trial balances at June 30, 2016, follow: Requirements 1. Make the adjusting entries that account for the differences between the two trial...
-
Hobart Company manufactures attach cases and suitcases. It has five manufacturing departments. The Molding, Component, and Assembly departments convert raw materials into finished goods; hence, they...
-
Using the data in question 4, Department Xs contribution to overhead as a percentage of sales is a. 20%. c. 12%. e. 32%. b. 30%. d. 48%. Data From Question 4 A company operates three retail...
-
Wild Expansion Co. acquired the following assets in exchange for various nonmonetary assets. 2011 Mar. 15 Acquired from another company a large lathe in exchange for three small lathes. The small...
-
15. You are provided with cost data for the Amber Amazing Restaurant for its signature dinner dish that it offers to its patrons. Use the following figure for this business to answer the questions...
-
The pKb values for the dibasic base B are pKb1 = 2.1 and pKb2 =7.5. Calculate the pH at each of the following points in thetitration of 50.0 mL of a 0.95 M B(aq) with 0.95 MHCl(aq). (a) before...
-
What is E&P and what is its significance?
-
How does a tax exclusion differ from a tax deduction?
-
Distinguish between realized gains and losses and recognized gains and losses.
-
List five provisions of the U.S. Constitution that limit a state's power to impose taxes.
-
What is the official name given to corporations qualifying under Subchapter S of the Internal Revenue Code?
-
Read Case: IT Ethics in the Workplace, and then conduct research on monitoring the online behavior of employees in the workplace. Address the following questions: What are the reasons why an employer...
-
A report from the college dean indicates that for the previous semester, the grade distribution for the Department of Psychology included 135 As, 158 Bs, 140 Cs, 94 Ds, and 53 Fs. Determine what kind...
-
On January 1, 2013, the Magnolia Association issued bonds with a face value of $200,000, a stated rate of interest of 8 percent, and a 10-year term to maturity. Interest is payable in cash on...
-
The following information was taken from the accounts of Healthy Eats, a delicatessen, at December 31, 2013. The accounts are listed in alphabetical order, and each has a normal balance. Accounts...
-
The following transactions pertain to Boykin Corporation for 2013: Jan. 1 Began operations when the business acquired $25,000 cash from the issue of common stock. Mar. 1 Paid rent for office space...
-
We have data on the distance covered by irrigation water in a furrow of a field. The data are to be used to relate the distance covered to the time since watering began. The data are given in Table...
-
Data were collected to discern environmental factors affecting health standards. For 21 small regions we have data on the following variables: The data are given in Table 8.27. (a) Perform a...
-
Twenty-five volunteer athletes participated in a study of cross-disciplinary athletic abilities. The group was comprised of athletes from football, baseball, water polo, volleyball, and soccer. None...
Study smarter with the SolutionInn App