Chao Corporation uses the accounts receivable

Chao Corporation uses the accounts receivable

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.


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