Chapter 7 Accounting for Bad Debts

Problem 7-1 - Accounting for Bad Debts

The Solo Company was started on January 1, 2010. The following events occurred
during 2010 and 2011.

2010

1.   Provided $4,000 of services on account.

2.   Collected $3,000 cash from accounts receivable.

3.   Estimated uncollectible accounts expense to be 1.5% of 2010 credit sales.

2011

1.   Wrote off $40 of accounts receivable that were deemed uncollectible.

2.   Provided $6,500 of services on account.

3.   Collected $5,400 cash from accounts receivable.

4. Received $5 from a bad debt that had been previously written off. Reinstated the account.

5.   Recorded the $5 cash received from the receivable reinstated in Event No. 4.

6.   Estimated uncollectible accounts expense to be 1% of 2011 credit sales.

Required

a.   Record the events in T-accounts, including closing the revenue and expense accounts to retained earnings.

b.   Record the events using the horizontal financial statements model under the titles of the affected accounts. Record a zero under each heading not affected by a given event. Compare the final balances in the T-accounts from Part a with the ending balances in the horizontal financial statements model.

Problem 7-1 Workpaper, part a. T-accounts, 2010

Problem 7-1 Workpaper, part b. Horizontal Financial Statements Model, 2010

Problem 7-1 Workpaper, part a. T-accounts, 2011

Problem 7-1 Workpaper, part b. Statements Model, 2011

in details what's is down syndrome ?

1. The following information is available for the first three years of operations for Santos Inc.:

1. Year              Taxable Income

      2020                         $850,000

      2021                           900,000

2. Depreciation of property, plant and equipment for financial reporting purposes amounts to $30,000 each year for 3 years beginning in 2020. The company is able to deduct the full cost under the IRS Code Section 179 $90,000 amount allowed for tax purposes in 2020 (note there is no tax depreciation in future years).
3. On July 1, 2020, $280,000 was collected in advance for rental of a building for a two-year period July 1, 2020 – June 30, 2022. The entire $280,000 was reported as taxable income in 2020. The company uses the accrual basis of accounting for financial statement purposes.
4. In 2021 Santos Company recorded a $40,000 accrual for litigation liability which will be paid in 2022.
5. The company sells its merchandise on an installment contract basis. In 2020, Santos Inc. reported gross profit of $220,000 tax purposes, and $520,000 for financial statement purposes. This will result in taxable amounts of $150,000 in each of the next two years.
6. Warranty expense accrued for financial reporting was $12,000 in 2020. Warranty deductions on the tax returns were $7,000 in 2020 and $5,000 in 2021.
7. Santos Inc. paid a $2,000 fine in 2021 for violating pollution laws.
8. The enacted tax rates existing at December 31, 2020 are 20% for 2020 and 25% for 2021 and thereafter.      

Instructions

1. Complete the worksheet provided. It includes the following.
   1. A reconciliation of Book Income to Taxable Income for 2020.
   2. A schedule of future taxable and (deductible) amounts at the end of 2020.
   3. A schedule of the deferred tax (asset) and liability at the end of 2020.
   4. The journal entry to record income tax expense, deferred income taxes, and income tax payable for 2020.
2. Show how the deferred income taxes should be reported on the Balance Sheet at December 31, 2020.
3. Show how the taxes should be reported on the Income Statement at December 31, 2020.
4. Repeat a. to f. above for 2021.

****Please show calculations or how you got the figures.

I will upload worksheet in a comment

Thinking question:What kind of consequences(including pros and cons) will the development and application of gene editing technology (including transgenic technology) bring to human society?Give your paragraph at least 350 words

Modern versus classical Sport

What role does techonolgy play in modern sport? Give an example of modern sport that relies on technology and speculate on the historical beginnings of that particular sport before such technology.

Analyze the components and requirements of its information systems technology program.

Explain the requirements for health care information technology systems to comply with federal, state, and local laws governing patient information security.