Question

. 20. Everett Company owns equipment that cost $88,000 when purchased on January 1, 2015. It has been depreciated using the straight-line method based on estimated salvage value of $8,000 and an estimated useful life of 10 years. The company has a calendar year end.

Prepare Everett Company's journal entries to (1) update depreciation to the date of sale, and (2) record the sale of the equipment in these two independent situations.

1. Sold for $56,000 on April 1, 2019.

2. Sold for $22,000 on October 1, 2019.

21.Cross Company uses the allowance method in accounting for uncollectible accounts. It began 2019 with a $12,500 debit balance in Accounts Receivable, and a $500 credit balance in Allowance for Doubtful Accounts.

(a) Prepare the necessary journal entries to record the selected transactions for Cross Company:

        Jul.     15        Determined that the account of Steve Young for $150 is uncollectible.

        Aug.     8        Received a check for $150 as payment on account from Steve Young, whose account had previously been written off as uncollectible.

2. At December 31, 2019, the balance in Accounts Receivable is $18,700 (debit) and the balance in Allowance for Doubtful Accounts is $180 (credit). Prepare the adjusting entry to record bad debt expense for the year if the credit manager determines that 3% of Accounts Receivable will become uncollectible.

3. Repeat part (b), but assume instead that the balance in Allowance for Doubtful Accounts is $220 (debit).

Answer 1

Journal entries