Depreciation,ratios,doubtful debts, bond redemption
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Solution Summary
The answer contains two parts 1.There are answers for thirty five multiple choice questions 2. Solutions for five accounting problems viz.,Provision for doudtful debts,depreciation and the disposal of machinery, redemption of bonds,calculation of ratios and pay roll computation
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PROBLEMS
Problem 1 - Accounts Receivable (10 points)
Dolan Company uses the allowance method to account for uncollectible accounts. Prepare the appropriate journal entries to record the following transactions during 2006. You may omit journal entry explanations.
June 20 The account of Ken Unruh for $1,000 was deemed to be uncollectible and is written off as a bad debt.
Bad debts a/c Dr 1000
To Ken Unruh 1000
Profit and loss account Dr 1000
To bad debts a/c 1000
Oct. 14 Received a check for $1,000 from Ken Unruh, whose account had previously been written off as uncollectible.
Account Receivable a/c Dr 1000
To Bad debts a/c 1000
(previously written off bad debt now reversed)
Bank a/c Dr 1000
To Accounts receivable 1000
Dec. 31 Use the following information for the year-end adjusting entry:
The balance of Accounts Receivable and Allowance for Doubtful Accounts at year end are $131,000 and $2,900, respectively. It is estimated that bad debts will be 3% of accounts receivable.
3% of accounts receivable 131000*3%=3930
Fresh provision=3930-2900=1030
Profit and loss ac Dr 1030
To provision for doubtful debts a/c 1030
Problem 2 - Bonds Payable (20 points)
Tipten Company issues $200,000 of 8%, 10-year bonds on January 1, ...
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