Module $5$ Homework

Problem $5-1$

Chris's Beamer Biz Inc., Year $2-20$X$2($See previous page for beginning balances$)$ During the

second year, the company bought $13$ Beamers at $$3,500$ each and sold $10$ at $9,000$ each. The company

has arranged terms that allow them to pay $40\%$ of the purchase price in cash and the rest in one year. The

company now sells the Beamers for $50\%$ down and the rest will be paid for by the customer next year.

The company paid rent of $$12,000.$ The company hired a worker who was paid $$13,000.$ Tax rate is the

same $(30\%$ of taxable income$).$ Paid $20$X$1$ taxes. The company will pay $20$X$2$ taxes next year. The

company paid the interest to Mike on December $31.$ The company paid office expenses of $$13,000$ and a

dividend of $$1,500.$ The company also paid $$3,000$ for advertising in The Post. On February $1^{st}$ the

company issued $50$ shares of common stock for $$12,000.$ The company owes their employees $$1,000$

more in wages at the end of the year. So how did the company do$?$

Prepare Journal Entries, T$-$accounts and financial statements.

Problem $5-2$

Bobcat Betty's Ham Sandwich Business, Year $1-20$X$1.$ It was January $1,20$X$1$ and Bobcat Betty had

$$35,000$ and decided she wanted to become rich. She decided to operate as a corporation, so she filed the

necessary papers with the State, put the money in the bank under the company name and issued $350$

shares of common stock to herself. On January $1$ the company paid $$2,000$ to rent a cart for one year.

During the year the company bought $20,000$ ham sandwiches for $$1\mathrm{.}00$ each. The company paid $$17,000$

cash for the sandwiches and owed $$3,000$ at the end of the year. The company sold $16,000$ sandwiches at

$$3\mathrm{.}00$ each. In addition, the company paid salaries of $$8,500$ and parking fees of $$900.$ At the end of the

year, in addition to what the company owed for sandwiches, the company owed $$500$ in parking fees. To

secure a parking spot, the company had put down a $$500$ security deposit at the beginning of the year.

Willow Bakeshop sold $$1,800,000$ of baked goods on credit during the year. At the beginning of the year, the

company's Accounts Receivable was $$350,000$ and the Allowance for Doubtful Accounts was $$18,000.$ During the

year, the company collected $$1,500,000$ of the Accounts Receivable and wrote off $$16,000$ in uncollectible

accounts. At the end of the year, the company estimates that $5\%$ of the receivables will be uncollectible.

Prepare all the journal entries related to Accounts Receivable and Allowance for Doubtful accounts for the year.

Additionally, calculate the amounts for A$/$R and ADA that should appear on the financial statements.