ABC Limited was formed a few years ago. ABC used the allowance method to measure its...
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ABC Limited was formed a few years ago. ABC used the allowance method to measure its bad debts. Selected accounts and their balances at 30 June 2018 were as follows: Accounts receivable $60 000 Less: Allowance for doubtful debts 120 Building $ 200 000 Less: Accumulated Depreciation_building 45 000 Goodwill $ 100 000 Share Capital: 2 000 000 ordinary shares, fully paid $21 000 000 Retained earnings (accumulated losses) ( 60 000 ) From 1 July 2018 to 30 June 2019 the company completed the following selected transactions. ABC Limited accounting year ends on 30 June. 2018 July 1 Sold goods to Kmart, receiving a S40 000, 9-month, 9% bill. The cost of sales was $20 000. July 28 Sales on account were $80 000; 3% of sales were estimated to be uncollectable, and estimated warranty expense was 4% of sales (For simplicity, ignore the cost of sales for this transaction). 2019 March 28 Write-offs of accounts receivable totaled $2700. April 1 Kmart dishonoured its bill. May 08 Issued 1,000 ordinary shares to acquire land with a cost of $11000, the shares were traded at $14 per share on that date. June 30 Aging of receivables indicates that $2200 of the total receivables was bad. June 30 The value of the goodwill was determined to be $150 000. June 30 The Building had a recoverable amount of $120 000. The building was depreciated on a straight- line basic with 40-year expected life and no residual value. Required: Calculate the following for ABC Limited: 1. The balance of accounts receivable on June 30, 2019: 2. The total bad debts expenses incurred during this accounting year: 3. The balance of ordinary shares on June30, 2019: 4. The balance of retained earnings on June 30, 2019: ABC Limited was formed a few years ago. ABC used the allowance method to measure its bad debts. Selected accounts and their balances at 30 June 2018 were as follows: Accounts receivable $60 000 Less: Allowance for doubtful debts 120 Building $ 200 000 Less: Accumulated Depreciation_building 45 000 Goodwill $ 100 000 Share Capital: 2 000 000 ordinary shares, fully paid $21 000 000 Retained earnings (accumulated losses) ( 60 000 ) From 1 July 2018 to 30 June 2019 the company completed the following selected transactions. ABC Limited accounting year ends on 30 June. 2018 July 1 Sold goods to Kmart, receiving a S40 000, 9-month, 9% bill. The cost of sales was $20 000. July 28 Sales on account were $80 000; 3% of sales were estimated to be uncollectable, and estimated warranty expense was 4% of sales (For simplicity, ignore the cost of sales for this transaction). 2019 March 28 Write-offs of accounts receivable totaled $2700. April 1 Kmart dishonoured its bill. May 08 Issued 1,000 ordinary shares to acquire land with a cost of $11000, the shares were traded at $14 per share on that date. June 30 Aging of receivables indicates that $2200 of the total receivables was bad. June 30 The value of the goodwill was determined to be $150 000. June 30 The Building had a recoverable amount of $120 000. The building was depreciated on a straight- line basic with 40-year expected life and no residual value. Required: Calculate the following for ABC Limited: 1. The balance of accounts receivable on June 30, 2019: 2. The total bad debts expenses incurred during this accounting year: 3. The balance of ordinary shares on June30, 2019: 4. The balance of retained earnings on June 30, 2019:
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1 The balance of accounts receivable on June 30 2019 174200 after adjustment of new bad debt allowan... View the full answer
Related Book For
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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