Question

TRX Company has been forced into receivership, and you have been appointed trustee. You decide to open your own set of books in order to distinguish more clearly between trans actions occurring before and after your appointment. The following account balances were reported on September 1, 2012:
Cash................ $ 26,700
Accounts Receivable......... 130,400
Inventory .......... 191,900
Property and Equipment......... 590,400
Total ................$939,400
Allowance for Uncollectibles ..... $ 16,000
Accumulated Depreciation....... 211,500
Accounts Payable......... 308,400
Capital Stock........... 800,000
Retained Earnings (deficit) ..... (396,500)
Total.................. $939,400
In the four months immediately after your appointment, the following transaction occurred:
1. Sales were made in the amount of $296,000, of which $31,500 were cash sales.
2. Receivables were collected in the following amounts:
Old receivables......... $ 76,800
New receivables......... 242,200
3. Additional inventory was purchased on account in the amount of $127,500.
4. Cash payments were made as follows:
On old accounts payable....... $206,500
On new accounts payable....... 61,600
For operating expenses........ 46,000
For trustee fees.......... 13,000
5. Journal entries were made to record:
(a) Bad debt expense of $21,600, of which $8,600 related to new accounts receivable.
(b) Depreciation expense of $32,400.
(c) Write-off of old accounts receivable of $21,000.
The inventory balance at the end of your first four months as trustee (the end of the fiscal year for TRX Company) was $149,700.

Required:
Prepare journal entries to record the foregoing on your set of books. Include appropriate closing entries.



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  • CreatedMarch 13, 2015
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