Create a balance sheet for the following information 1)Performed services for $1
ID: 2458495 • Letter: C
Question
Create a balance sheet for the following information
1)Performed services for $140,000 on account.
2)On 2/1/15, collected fees of $12,000 in advance. $1,000 worth of services are to be performed each month from 2/1/15 to 1/31/16.
3)On 2/1/15, purchased equipment for $15,000 plus sales taxes of $750. $3,000 cash was paid with the remaining balance on account. Check #455 was used.
4)Collected $133,000 on 3/5/15 from customers on account.
5)Paid $16,370 on accounts payable. Check #456 was used.
6)Paid operating expenses of $97,500. Check #457 was used.
7)Acquired a patent with a 10-year life for $9,600 cash on 3/1/15. Check #458 was used.
8)Wrote off a receivable of $1,200 for a customer who went bankrupt.
9)On 3/31/15, iKonk sold for $2,620 cash equipment which originally cost $13,000. It had an estimated life of 5 years and salvage of $2,000. It had an estimated life of 5 years and a salvage of $2,000. Accumulated depreciation as of 12/31/2014 was $8,000 using the straight line method. (1) Record depreciation on the equipment sold, then (2) record the sale.
10)AJE 3/31/15: Record revenue earned from item 2 above.
11)AJE: At 3/31/15, $26,000 of Accounts Receivable is not yet due. The bad debt percentage for these current receivables is 4%. The remaining balance in Accounts Receivable is past due. The bad debt percentage for these receivables is 23.75%. Record bad debt expense.
HINT: You will need to calculate the balance in accounts receivable before calculating bad debt expense.
12)AJE: Record depreciation as of 3/31/15. The new equipment purchased in February is being depreciated using the double declining balance method over 5 years. The equipment has an estimated salvage value of $1,000. The equipment that was on the books on 12/31 that is still owned by Konka Kola is being depreciated over a 10 year life using straight line with no salvage value.
13)AJE: Depreciation is recorded on the building on a straight-line basis using a 30-year life and a salvage value of $10,000.
14)AJE: Amortization is recorded on the patent.
Explanation / Answer
Remarks :- 1) Opening balances are not available
2) Value of Building is not given in problem, so no entry is made in books for the same
Cash& Bank A/c Particulars Amount Particulars Amount Fee Collected 12000 Equipment Purchased 15750 Income received 133000 Paid to Account Payble 16370 Cash for sale of equipment 2620 Operating Expenses 97500 Patent Aquired 9600 147620 139220 Closing balance 8400 P/l A/c Particulars Amount Particulars Amount Operating Expenses 97500 Cash A/c 140000 bad debt 1200 Fees received 3000 Dep on sold equipment 550 Sale of Asset 2620 Loss on sale of equipment 1830 Provision for bad debts 1377.5 Amortisation on Patent 960 Depriciation on equipment 492 103909.2 145620 Profit on operations 41710.83 Account receivable Particulars Amount Particulars Amount Service Performed 140000 Income received 133000 bad debt 1200 Provision for bad debts 1377.5 140000 135577.5 Closing Balance 4422.5 Account payble Particulars Amount Particulars Amount Cash A/c 16370 16370 0 Closing Balane 16370