I. Journalizing Bad Debts--Allowance Method Please explain - show work

Noell Co. sells Christmas angels. Noell determines that at the end of December, it has the following aging schedule of Accounts Receivable:

Customer

Total

Not Yet Due

Number of Days Past Due

1-30

31-60

61-90

Over 90

DV Farmer

$5,000

$3,000

$2,000

JJ Joysen

3,000

1,000

2,000

NJ Bell

1,500

500

1,000

JC Net

2,000

2,000

11,500

3,000

3,000

2,500

2,000

1,000

% uncollectible

1%

5%

10%

20%

50%

Total Estimated Uncollectible Amounts

(a) show Calculate the total estimated bad debts based on the information presented in the table.

(b) show the year-end adjusting journal entry to record bad debts using the aged uncollectible accounts receivable determined in (a).Assume the current balance in Allowance for Doubtful Accounts is a $650 debit. Dr. Cr.

(c) Assume that the company has a policy of providing for bad debts at the rate of 1% of sales, with Sales for 2008 being $55,000. Prepare the adjusting entry for bad debts under the percentage of sales basis.Dr. Cr.

II. Computing Depreciation Expense show work explaining

Eastman Company purchased three delivery trucks over the past years to use in operations.Due to frequent turnover in the accounting department, a different method of depreciation was used for each delivery truck purchased.Information pertaining to each delivery truck is summarized below:

Truck ID #

Date Acquired

Cost

Salvage Value

Useful Life (in years)

Depreciation Method

1

1/1/06

$35,000

$10,000

5

Straight line

2

1/1/06

$40,000

$10,000

4

Units-of-production

3

1/1/07

$50,000

$11,500

5

Declining balance

For the declining balance method, the company uses the double-declining rate.For the units-of-activity method, total miles are expected to be 100,000.Actual miles of use in the first two years were: 2006, 18,000; 2007, 22,000.

(a)explain the the annual depreciation for the first two years of estimated useful life of the equipment, the accumulated depreciation at the end of the first two years and the book value of the equipment at the end of each of the first two years by (a) the straight-line method, (b) the units of production method, and (c) double-declining-balance method.

STRAIGHTLINE METHOD

Year

Cost

Residual Value

Depreciable Base(Cost - Residual Value)

Estimated Useful Life

Depreciation Expense

Accumulate Depreciation

Book Value (year-end)

2006

$35,000

$10,000

5

2007

$35,000

$10,000

5

UNITS OF PRODUCTION METHOD

Year

Cost

Residual Value

Depreciable Base(Cost - Residual Value)

Depreciation Per Unit

Actual Miles

per year

Depreciation Expense

Accumulated Depreciation

Book Value

(year-end)

2006

$40,000

$10,000

18,000

2007

$40,000

$10,000

22,000

Calculation for depreciation per unit:

DOUBLE-DECLINING BALANCE METHOD

Year

Book Value Beginning Year

Double Declining Balance Rate

Depreciation Expense

Accumulate Depreciation

Book Value End Year

2007

$50,000

2008

Calculation for double-declining balance rate:

III. explainComputing & Journalizing Payroll Expensesshow work

Mary Stine's regular hourly wage rate is $12, and is paid one and one-half times her regular rate for any hours which exceed 40 hours per week. During a March pay period, Mary works 47 hours. Mary's federal income tax withholding is $70, the applicable FICA tax rate is 8%, there is no state income tax and she has no voluntary deductions.

(a) Compute Mary Stine's gross earnings and net pay for the pay period.

Gross earnings:

Regular pay__________

Overtime pay+__________

Gross earnings__________

Less:FICA taxes payable (Social Security & Medicare)_(_______)_

Federal income taxes payable_(________)__(________)_

Net pay=______________

(b) show the journal entry to record Mary's pay, including taxes, for the period (use March 15 as date of the entry).Dr. Cr.

(c) Additionally, in March, gross earnings for the company Mary is employed with totaled $50,000.All earnings ($50,000) are subject to 8% FICA taxes, 5.4% state unemployment taxes, and 0.8% federal unemployment taxes.Prepare the entry to record payroll tax expense for Mary's employer for the month of March (use March 31 as date of entry).

Dr. Cr.