QUESTION 7a:
Alpha Company prepares quarterly adjusting entries. On November1, 2017, Alpha Company purchased equipment with a sticker price of$8,515 and signed a note due in 9 months for $10,000 that includedinterest in the value of the note. Use this information to preparea general journal entry for the August 1 equipment purchase.Prepare any additional general journal adjusting entries for FiscalYears 2017 & 2018. Additionally, prepare the general journalentry to record the payment of the note when due in 2018.
General Journal
General Journal
Date | Accounts | Debit | Credit |
11/1/17 | | | |
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12/31/17 | | | |
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3/31/18 | | | |
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6/30/18 | | | |
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7/31/18 | | | |
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QUESTION 7b:
Alpha Company uses aging of Accounts Receivable to estimateuncollectible. The unadjusted Trial Balance amount of AccountsReceivable on December 31, 2016, has a balance that consistsof:
Days outstanding | Amount | Estimated Uncollectible |
0 – 60 | $300,000 | 1% |
61 – 120 | 90,000 | 2% |
Over 120 | 100,000 | 6% |
Total | $490,000 | 4,005 |
Activity during FiscalYear 2016, for Alpha Company consisted ofJuly 15 Alpha wrote of the Bravo Zulu Company account as notcollectable for the amount of $8,500.
Oct. 20 Alpha company recovered $5,500 from the Charlie DeltaCompany for settlement of their prior debt that had been off duringFY 2015.
Alpha Company’s December 31, 2015 allowance for uncollectibleaccounts was $2,700/ Under the aging method, what amounts shouldAlpha Company report at December 31, 2016 for:
1. Allowance for Uncollectible Accounts
2. Bad Debt Expense
ANSWER 7:
1.___________________________
2.___________________________
