Answer:
Journal Entries:
Dec 31 Bad Debts Expense $4875
Allowances for doubtful accounts $4875
Feb 1 Allowances for doubtful accounts $580
Accounts Receivable - P.Park $580
June 05 Accounts Receivable - P.Park $580
Allowances for doubtful accounts $580
June 05 Cash $580
Accounts Receivable - P.Park $580
Explanation:
On December 31 Chen estimates the potential receivable expected to be not paying to him. Therefore, he write off the receivable from balance sheet using the percentage of sales method of receivable of ($975000 x 0.5% = $4875). On Feb 1 Chen write off P.Park from receivable of $580 as he comes to know he will not pay but on June 5 P.Park pay him $580. First Chen reinstate the receivable afterwards he collect cash from receivable.
Financial records are used for taxes, to show investors, to prove strength of the company in order to get loans. It is vital that financial records are accurate and up to date because of the many people that rely on the data.
Tim should be in governance.
Suzette should be in planning
Answer:
(a) $5,690
(b) $380
Explanation:
Given that,
current assets = $2,090
Net fixed assets = $9,830
Current liabilities = $1710
Long-term debt = $4520
Total assets:
= Current assets + Net fixed assets
= $2,090 + $9,830
= $11,920
Total Liabilities:
= Current Liabilities + Long-term Debt
= $1710 + $4520
= $6,230
(a) Total assets = Total liabilities + Stockholder's equity
$11,920 = $6,230 + Stockholder's equity
$11,920 - $6,230 = Stockholder's equity
$5,690 = Stockholder's equity
(b) Net working capital:
= Current assets - Current liabilities
= $2,090 - $1,710
= $380
