Reference no: EM13929278
The following transactions apply to Wade Company for 2013, the first year of operation:
1. Recognized $220,000 of service revenue earned on account.
2. Collected $162,000 from accounts receivable.
3. Paid $150,000 cash for operating expenses.
4. Adjusted the accounts to recognize uncollectible accounts expense. Wade uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.
The following transactions apply to Wade for 2014:
1. Recognized $398,000 of service revenue on account.
2. Collected $402,000 from accounts receivable.
3. Determined that $2,400 of the accounts receivable were uncollectible and wrote them off.
4. Collected $1,000 of an account that had previously been written off.
5. Paid $210,000 cash for operating expenses.
6. Adjusted the accounts to recognize uncollectible accounts expense for 2014. Wade estimates uncollectible accounts expense will be 0.5 percent of sales on account.
Required:
Complete the following requirements for 2013 and 2014. Complete all requirements for 2013 prior to beginning the requirements for 2014.
a. Identify the type of each transaction (asset source, asset use, asset exchange, or claims exchange).
b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the one shown here. Use + for increase, Use - for decrease, and NA for not affected. Also, in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example.
![860_264-B-A-C-R (1710).png](https://secure.expertsmind.com/CMSImages/860_264-B-A-C-R (1710).png)
c. Record the transactions in general journal form, and post them to T-accounts (begin 2014 with the ending T-account balances from 2013).
d. Prepare the income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows.
e. Prepare closing entries and post these closing entries to the T-accounts. Prepare the post closing trial balance.
How does this relate to strategic advantage
: It can be argued that knowledge flow, sharing, and leveraging is required for effective global business management. Present an example of this in practice (what does it look like?), and discuss how value is generated. How does this relate to str..
|
Assuming both companies use the percent of receivables
: Assuming both companies use the percent of receivables allowance method, what is the estimated percentage of uncollectible accounts for each company?
|
Concepts of risk and materiality in auditing
: When taken together, the concepts of risk and materiality in auditing:
|
Determine the flow rate of oil through the pipe
: Determine the flow rate of oil through the pipe assuming the pipe is (a) horizontal, (b) inclined 15° upward, (c) inclined 15° downward. Also verify that the flow through the pipe is laminar.
|
Prepare closing entries and post these closing entries
: Prepare closing entries and post these closing entries to the T-accounts. Prepare the post closing trial balance.
|
What is the line between being persistent and annoying
: How can you be certain about names, titles, and e-mail addresses of the people with whom you interview? How frequently should you contact a potential employer with e-mails or phone calls? What's the line between being persistent and annoying?
|
The auditors observation of the client''s physical inventory
: Assume that an auditor is focusing on two weaknesses in internal control. Although neither is by itself a material weakness, the two significant deficiencies in combination represent a material weakness.
|
Creating a meaningful statistical data analysis for dataset
: Creating a meaningful statistical data analysis for a dataset, Case Study: You work for a health insurance company that provides medical coverage for their members. You are the Quality Consultant in this healthcare organization
|
How do your personal values interact with a mindful approach
: How do your personal values interact with a mindful approach to ethical decision making? In light of your personal values, which ethics theory best fits your personal view of ethical decision making? Why
|