Acct 2 Week 1

E8-3

E8-3 The ledger of Hixson Company at the end of the current year shows Accounts
Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.
Journalize Transactions
Journalize entries to record allowance for doubtful accounts using two different bases.
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance is uncollectible.
DATE	ACCOUNT TITLE	DEBIT	CREDIT
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of
net sales, and (2) 10% of accounts receivable.
DATE	ACCOUNT TITLE	DEBIT	CREDIT
DATE	ACCOUNT TITLE	DEBIT	CREDIT
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net
sales and (2) 6% of accounts receivable.
DATE	ACCOUNT TITLE	DEBIT	CREDIT
DATE	ACCOUNT TITLE	DEBIT	CREDIT

BE9-13 Information related to plant assets, natural resources, and intangibles at the end of
2011 for Spain Company is as follows: buildings $1,100,000; accumulated depreciation—buildings
$650,000; goodwill $410,000; coal mine $500,000; accumulated depletion—coal mine $108,000.
Objective: Classify long-lived assets on balance sheet.
Prepare a partial balance sheet of Spain Company for these items.
	SPAIN COMPANY
	Balance Sheet (partial)
	12/31/11
Property, plant, and equipment
	$0
	0	$0
	0
	0	0
			$0
Intangible assets
			0
On above, line titles and appropriate amounts need to be entered.

E9-2 Trudy Company incurred the following costs.	Instructions
	Indicate to which account Trudy would debit each of the costs.
	Account
1. Sales tax on factory machinery purchased $ 5,000
2. Painting of and lettering on truck immediately upon purchase 700
3. Installation and testing of factory machinery 2,000
4. Real estate broker’s commission on land purchased 3,500
5. Insurance premium paid for first year’s insurance on new truck 880
6. Cost of landscaping on property purchased 7,200
7. Cost of paving parking lot for new building constructed 17,900
8. Cost of clearing, draining, and filling land 13,300
9. Architect’s fees on self-constructed building 10,000