Question

Credit $ 1.200 Aberkonkie Corporation Post-Closing Trial Balance December 31, 2021 Debit Cash $ 24,300 Accounts Receivable Allowance for Doubtful Accounts Equipment 20.000 Accumulated Depreciation Equipment Buildings 100.000 Accumulated Depreciation-Buildings Land 20,000 Accounts Payable Common Stock Retained Earnings 15.000 15.000 12,370 90.000 53.130 $186,700 16.700 During the first quarter of 2022, the following transaction occurred: 1. On February 1. Aberkonkie collected fees of $12.000 in advance. The company will perform $1,000 of services each month from February 1, 2022. to January 31, 2023. 2. On February 1. Aberkonkie purchased computer equipment for $9.000 plus sales taxes of $600. $3,000 cash was paid with the rest on account Check 455 was used. 3. On March 1. Aberkonkie acquired a patent with a 10-year life for $9.500 cash. Check 456 was used. 4. On March 28, Aberkonkie recorded the quarter's sales in a single entry. During this period, Aberkonkie had total sales of $140,000 (not including the sales referred to in item 1 above). All of the sales were on account. $. On March 29, Aberkonkie collected $133,000 from customers on account 6/ On March 29. Aberkonkie paid $16,370 on accounts payable. Check 457 was used. On March 29, Aberkonkie paid other operating expenses of $97,525. Check 458 was used. 3. On March 31. Aberkonkie wrote off a receivable of $200 for a customer who declared bankruptey. 9. On March 31. Aberkonkie sold for $1.620 equipment that originally cost $11.00. It had an estimated life of 5 years and salvape of $1,000. Accumulated depreciation as of December 31, 2021, was $8.000 using the straight line method. (Hint: Record depreciation on the equipment sold, then record the sale.) Bank reconciliation data and adjustment data: 1. The company reconciles its bank statement every quarter. Information from the December 31, 2021. bank reconciliation is: Deposit in transit: 12/30/2021 $5.000 Outstanding checks 6440 3.444 452 333 1453 865 454 5.845 The bank statement received for the quarter ended March 31, 2022, is as follows Beginning balance per bank $ 29,787 Deposits: 1/2/2022, 55.000; 2/2/2022, 512,000; 3/30/2022, $133.000 150,000 Checks: 452, 5333; #453, 5865; 457. $16,370 458, 597,525 (115.093) Debit memo: Bank service charge (record as operating expense) (100) Ending bank balance $ 64,594 2. Record revenue earned from item 1 above. 3. $26,000 of accounts receivable at March 31, 2022, are not past due yet. The bad debe percentage for these is 46. The remaining balance of accounts receivable is past due. The bad debt percentage for these is 23.75%. Record bad debt expense. (Hint: You will need to compute the balance in accounts receivable before calculating this.) 4. Depreciation is recorded on the equipment still owned at March 31, 2022. The new equipment pur- chased in February is being depreciated on a straight-line basis over 5 years and salvage value was estimated at $1,200. The old equipment still owned is being depreciated over a 10-year life using straight line with no salvage value.

Answer 1

Date	Account Title	Debit	Credit
1-Feb	Cash	12000
	Fees revenue(1000*2)		2000
	Unearned Fees revenue(12000-2000)		10000
	Equipment	9600
	Cash		3000
	Accounts payable		6600
1-Mar	Patent	9600
	Cash		9600
28-Mar	Accounts receivable	140000
	Sales revenue		140000
29-Mar	Cash	133000
	Accounts receivable		133000
	Accounts payable	16370
	Cash		16370
	Operating expenses	97525
	Cash		97525
31-Mar	Allowance for doubtful accounts	200
	Accounts receivable		200
	Depreciation expense	500
	Acc. Depn.-equipment		500
	(11000-1000)/5*3/12
	Cash	1620
	Acc. Depn.-equipment(8000+500)	8500
	Loss on sale(Bal.fig.)	880
	Equipment		11000
	Adjusting entries
1	Operating expense	100
	Cash		100
3	Bad debt expense	800
	Allowance for doubtful accounts		800
4	Depreciation expense	225
	Acc. Depn.-equipment		225
	On old eqpt(20000-11000)=9000/10*3/12)
	Depreciation expense	280
	Acc. Depn.-equipment		280
	On new eqpt((9600-1200)/5*2/12)
5	Depreciation expense	750
	Acc. Depn.-Buildings		750
	(100000-10000)/30*3/12
6	Amortisation expense	80
	Acc. Amortsn.-patents		80
	9600/10/12
7	Income tax expense	12258
	Income tax payable		12258
		444288	444288

Adjusting   J/E 1
Bank Reconciliation statement
As at Mar31, 2022
Balance as per bank	64594
Add: Deposist in transit	1620
Less:Checks o/s
Ch.440	-3444
Ch.454	-5845
Ch 455	-3000
Ch.456	-9600
Adjusted balance as per bank	44325
Balance as per Co.Cash a/c	44425
Less: bank service chg.	-100
Adj.bal.as per cash a/c	44325

Adjusting J/E 3
A/R	Amt.	Bad Debt %	B/D amt.
Not past due yet	26000	4%	1040
Past due	3200	23.75%	760
	29200		1800
Bal.in allowance for D/acs.(mar.31,2022)			1000
Additional allowance reqd.(1800-1000)			800

Unadjusted Trial balance
Cash	44425
Accounts Receivable	29200
Allowance for D. a/cs		1000
Equipment	18600
Acc. Depn. Eqpt.		7000
Buildings	100000
Acc. Depn.Bldgs.		15000
Patents	9600
Land	20000
Accounts payable		2600
Unearned Fees revenue		10000
Common stock		90000
Retained earnings		53130
sales revenues		140000
Fees revenue		2000
Deprciation expense	500
Loss on sale of eqpt.	880
Operating expenses	97525
Totals	320730	320730

Adjusted Trial balance
Cash	44325
Accounts receivable	29200
Allowance for D.a/cs		1800
Equipment	18600
Acc. Depn.-equipment		7505
Buildings	100000
Acc. Depn.-Buildings		15750
Patent	9600
Acc. Amortsn.-patents		80
Land	20000
Accounts payable		2600
Unearned Fees revenue		10000
Income tax payable		12258
Common stock		90000
Retained Earnings		53130
Sales revenue		140000
Fees revenue		2000
Operating expenses	97625
Loss on sale of eqpt.	880
Depreciation expense	1755
Amortisation expense	80
Bad debt expense	800
Income tax expense	12258
Totals	335123	335123

Income Statement
Sales revenue		140000
Fees revenue		2000
Total revenues		142000
Less:
Operating expenses	97625
Loss on sale of Eqpt.	880
Depreciation expense	1755
Amortisation expense	80
Bad debt expense	800	101140
Income before tax		40860
Less:Income tax expense		12258
Net income		28602

Statement of Ret. Earnings
Beginning balance	53130
Add: Net incomefor theYr	28602
Ending balance	81732

Classified balance sheet
Current assets
Cash	44325
Accounts receivable	29200
Allowance for D. a/cs	-1800
Total current assets		71725
Fixed assets
Land	20000
Equipment	18600
Acc. Depn.-equipment	-7505
Buildings	100000
Acc. Depn.-Buildings	-15750
Patent	9600
Acc. Amortsn.-patents	-80
Total fixed assets		124865
Total assets		196590
Liabilities & SH.equity
Current Liabilities
Accounts payable	2600
Unearned Fees revenue	10000
Income tax payable	12258
Total current liabilities		24858
Shareholders"equity
Common stock	90000
Retained Earnings	81732
Total Shareholders'equity		171732
Total Liabilities & SH.equity		196590

	Cash a/c
	Beg. Bal.	24300
1-Feb	Cash	12000
1-Feb	Cash		3000
1-Mar	Cash		9600
29-Mar	Cash	133000
29-Mar	Cash		16370
29-Mar	Cash		97525
31-Mar	Cash	1620
1	Cash		100	44325