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Vulcan Service Company experienced the following transactions for Year 1, its first year of operations:...

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Accounting

Vulcan Service Company experienced the following transactions for Year 1, its first year of operations:

  1. Provided $78,000 of services on account.
  2. Collected $46,800 cash from accounts receivable.
  3. Paid $26,000 of salaries expense for the year.
  4. Adjusted the accounts using the following information from an accounts receivable aging schedule:

Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance
Current $23,088 0.01
0 to 30 1,560 0.05
31 to 60 2,184 0.10
61 to 90 1,872 0.30
Over 90 days 2,496 0.50

Required

  1. Record the given transactions in general journal form and post to T-accounts.
  2. Prepare the income statement for Vulcan Service Company for Year 1.
  3. What is the net realizable value of the accounts receivable at December 31, Year 1?

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