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goblinko [34]
3 years ago
13

On November 1, 2013, Wenger Co. paid its landlord $4,260 in cash as an advance rent payment on its store location. The six-month

lease period ends on April 30, 2014, at which time the contract may be renewed. Required: a.1 Prepare the horizontal model to record the six-month advance rent payment on November 1, 2013. (+ for increase and – for decrease).
Business
1 answer:
Lubov Fominskaja [6]3 years ago
3 0

Answer:

The journal entry should be:

November 1, 2013, six months of rent paid in advance

Dr Prepaid rent 4,260

    Cr Cash 4,260

Assets                                             = liabilities + equity

cash            prepaid rent

-$4,260       $4,260                          $0              $0

Revenues           -          Expenses          =           Net income

$0                                  $0                                   $0

This operation represents an operating cash flow activity.

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Estimating Uncollectible Accounts and Reporting Accounts Receivable LaFond Company analyzes its accounts receivable at December
Delicious77 [7]

Answer:

A. Bad debt expense workings

Estimated loss =

0 - 30 days 1% of $90,000 = $900

31 - 60 days 2% of $20,000 = $400

61 - 120 days 5% of $11,000 = $550

121 - 180 days 10% of $6,000= $600

Over 180 days 25% of $4,000 = $1,000

Total Estimated loss = $3,450

Pre-adjusted bal of Uncollectible debt Account = $520

Balance to reflect in the Financial statement will be adjusted to reflect $3,450 just computed.

Addition to the Expense will be $3,450 minus $520 = $2,930

B.

Financial statement Effect template

Cash Asset = -$2,930

+

Non - Cash Asset = $0

=

Liability = $0

+

Contributed Capital = $0

+

Earned Capital -$2,930

C.

Account Receivable as at Dec 31 = $131,000

Less Allowance for uncollectible debts total = -$3,450

Balance Account receivables = $127,550

Explanation:

LaFond Company

Bad debt expense are combination of both doubtful and uncollectible debts within a financial year.

A debt becomes doubtful based on previous trends around debt collections. From the question for example 0 - 30days aged debt is doubtful of 1% uncollectibility, and 31 - 60 days aged debt is 2% etc.

A debt is written off as bad if it is adjudged to be uncollectible.

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