Get Academic Help From
Professional Essay Writers
100% Plagiarism-Free Essays
The Scooter Warehouse provided the following information at December 31, 2011:
|
Bank Reconciliation
through
LO7
Returned customer checks Outstanding checks . . . . . . . . . . (1,356) marked NSF . . . . . . . . . . . . . . (375)
Error in recording of office
supplies . . . . . . . . . . . . . . . . . Adjusted cash balance, |
234
|
Adjusted cash balance, |
|
12/31/11 . . . . . . . . . . . . . . . . . |
$17,400 |
12/31/11. . . . . . . . . . . . . . . . . |
$17,400 |
The company invested $26,000 in a portfolio of marketable securities on December 22, 2011. The portfolio’s market value on December 31, 2011, had increased in value to $28,500.
On November 1, 2011, The Scooter Warehouse sold 25 scooters to Bermuda Fantasy Resort for
$65,000. The resort paid $5,000 at the point of sale and issued a one-year, $60,000, 5 percent note for the remaining balance. The note, plus accrued interest, is due in full on October 31, 2012. The Scooter Warehouse adjusts for accrued interest revenue monthly.
The Scooter Warehouse uses a balance sheet approach to account for uncollectible accounts expense. Outstanding accounts receivable on December 31, 2011, total $450,000. After aging these accounts, the company estimates that their net realizable value is $435,000. Prior to making any adjustment to record uncollectible accounts expense, The Scooter Warehouse’s Allowance for Doubtful Accounts has a credit balance of $4,000.
a. Prepare the journal entry necessary to update the company’s accounts immediately after per- forming its bank reconciliation on December 31, 2011.
b. Prepare the journal entry necessary to adjust the company’s marketable securities to market value at December 31, 2011.
c. Prepare the journal entry necessary to accrue interest in December 2011.
d. Prepare the journal entry necessary to report the company’s accounts receivable at their net realizable value at December 31, 2011.
e. Discuss briefly how the entry performed in part d affects the accounts receivable turnover rate. Does the write-off of an account receivable affect the accounts receivable turnover rate differ- ently than the entry performed in part d? Explain.
We guarantee 100% privacy throughout and after your interaction with us. Your identity is kept private as well as any additional information you provide to us. Our work is also 100% guaranteed to have zero plagiarism as well as help you pass in whichever course you are undertakin
Email:
[email protected]
WHATSAPP:
+1 (573) 260-3076