Chao Corporation uses the accounts receivable aging method to account for Uncollectible Accounts Expense. As of December 31, Chao’s accountant prepared the following data about ending receivables: $40,000 was not yet due (1 percent expected not to be collected), $20,000 was 1-60 days past due (4 percent expected not to be collected), and $4,000 was over 60 days past due (8 percent expected not to be collected). At December 31, Allowance for Uncollectible Accounts had a credit balance prior to adjustment of $400. In the journal provided, prepare Chao’s end-of-period adjustment for estimated uncollectible accounts. Also prepare the entry that would have been made had the credit balance instead been a debit balance.Assuming a perpetual inventory system is used, use the following information to calculate cost of goods sold on an average-cost basis.Dec.1Beginning inventory50 units @ $229Purchases50 units @ $2417Sales25 units22Purchases75 units @ $2727Sales40 unitsPrepare journal entries for the following transactions involving notes payable for Homer Company, whose fiscal year ends June 30. Omit explanations.June20Paid a trade account payable with a 90-day, 9 percent $60,000 note. Interest is in addition to the face value.30Made end-of-year adjusting entry to accrue interest expense for the note.30Made end-of-year closing entry pertaining to interest expense.Sept.18Paid amount due on note, plus interest.
