At the end of 2017 fiscal year, L&Z Co. has the following information: Balance Sheets Current Assets
Question:
At the end of 2017 fiscal year, L&Z Co. has the following information:
Balance Sheets
Current Assets
Accounts receivable, net of allowance of $1,076 $16,194
a) During 2018, the company wrote off $200 of specific accounts that were deemed uncollectable. Prepare the journal entry to record the write-off of these accounts receivable. (4 pts)
b) At the end of 2018 (12/31/2018), management estimate 8% of account receivables balance will likely be difficult to collect. The company’s Accounts Receivable has a gross ending balance of $17,600 . Prepare the journal entry to record bad debt expense for 2018 using the percentage of receivables method (the balance sheet approach).
c) If credit sales for 2018 were $118,000, compute the amount of cash collected from customers in 2018 (note: take into account the event in part a).
d) On Oct 1st , 2018, the company sold coal to Beta Electric, receiving a 6-month, noninterest-bearing note for $100,000. The effective interest rate on the note is 8%. The company has a fiscal year-end of 12/31.
- Prepare the journal entry to record the sale.
ii. Prepare adjusting journal entries regarding the note receivable on 12/31/2018.
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw