Question

a. At the end of January, the company estimates that the remaining units of inventory are expected to sell in February for only $100 each. b. At the end of January, $5,300 of accounts receivable are past due, and the company estimates that 35% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 3% will not be collected. c. Accrued interest expense on notes payable for January. Interest is expected to be paid each December 31. d. Accrued income taxes at the end of January are $13,600. 3. Prepare an adjusted trial balance as of January 31, 2021.

Answer 1

Answer:

Trial Balance :    Debit 15558  = 15558 Credit

Explanation:

b.) Noncollectable amount = $5300 * 35% = 1855

 Entry: Dr bad debts expense  1855

                  Cr Allowance for bad debts     1855

        (To record bad debts expense).

5300-1855= 3445 * 3% = $103 will not be collected.

Entry:          Dr  Bad debts expense  103

                            Cr  Allowance for bad debts   103

        ( To record bad debts expense)      

d.) Entry:

           Dr Income tax expense 13600

                    Cr Income tax payable   13600

    (To record accrued income tax expense).

Ledgers  :

Bad debt expense = 1855+103 = 1958

Allowance for bad debts = 1855+103 = 1958

Income tax expense = 13600

income tax payable = 13600.

Trial balance:

                               

_Dr__________________________________________________Cr____

        Bad debt expense     1958     -----     1958 Allowance for bad debts

         Income tax expense 13600   -----  13600  Allowance for bad debts

Total =  15558                                              -------      Total = 15558