Preview

Woodlawn Case Part 3

Good Essays
Open Document
Open Document
672 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Woodlawn Case Part 3
Case Part 3
Report for the CFO
There are several necessary journal entries that have been made to adjust the unadjusted trial balance.
For Allowance for doubtful accounts:
1. In 2009, $ 58,621.84 was directly written off to bad debt expense reflecting the amounts owed by customers who had gone bankrupt during the year. The journal entry would have been recorded as Dr Bad debt expense 58,621.84 Cr Account receivable 58,621.84 To record the uncollectable amount due to customer bankruptcy.
The conditions of using the direct write-off method is either for companies in their first year of operations, or for whom uncollectible accounts are immaterial. Woodlawn does not fit either case. Therefore, it is wrong for Woodlawn to use the direct write-off method. The following journal entry is what should have been recorded,
Dr Allowance for doubtful account 58,621.84 Cr Account receivable 58,621.84 To record the uncollectible amount due to customer bankruptcy.
Therefore, the following adjusted entry is made to correct the write-off of $58,621.84.
Dr. Allowance for doubtful account 58,621.84 Cr. Bad debt expense 58,621.84 To record the correction of error made in write-off.
2. Historically, bad debt has averaged out to approximately 1.5% of revenues. Therefore, we estimate that bad debt in 2009 would be 1.5% of revenue. The journal entry is the following,
Dr. Bad debt expense 20,279.28* Cr. Allowance for doubtful account 20,279.28 To record the estimated uncollectible amount. *(Calculation: 1.5%*$1,351,951.83=20,279.28)
3. As Tim mentioned that Woodlawn has received $93,256.41 that’s over 90 days past due since August 31, 2010. There is no journal entry needed to be done, since it had past the fiscal year end.
4. Woodlawn has not received $69,942.13 from Erie Limited

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Acc/290 Week 3

    • 286 Words
    • 2 Pages

    Adjusted trail balance shows balances that derive from a ledger account that is created after adjusting entries. Adjusted trial balance will show balances of revenue and expenses along with assets, liabilities and stockholder equity. The adjusted trial balance is prepared directly from changes which occur in stockholders equity, income statement, and the balance sheet.…

    • 286 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Tanglewood Case #3

    • 573 Words
    • 3 Pages

    For each division use the data tables provided to estimate how each method fares in terms…

    • 573 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Liabilities to Asset ratio for 2010 is 57.4% and for 2009 61.5%. Long-Term Debt Ratio for 2010 is 34.4% and for 2009 is 38.4%. Debt Equity Ratio for 2010 is 81.1% and for 2009 is 100.3%. These numbers are pretty typical for public…

    • 623 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Acc 567 Problem 4

    • 1571 Words
    • 7 Pages

    a. Provide the required adjusting entries at the end of 2011, assuming that the December 31, 2011, balance of Inventory of Supplies has been confirmed by physical count. Make entries in the general journals of both the General Fund (omitting subsidiary detail) and governmental activities at the government-wide level.…

    • 1571 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Thomas Wood Murder Case

    • 769 Words
    • 4 Pages

    On the evening of October twenty-third, 2006 officer Thomas Wood was the victim of a fatal police shooting. Officer Wood had served the Maywood Police Department for 12 years. He also served as a reserve police officer with the Schiller Park Police Department for three years while serving as a part-time officer with Stone Park Police Department for two years.…

    • 769 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Woodlawn Trial

    • 1468 Words
    • 6 Pages

    There is a boy in all of your high school advanced classes. You talk to him regularly, but not quite enough to spend time together outside of school. He is what your parents would call “a good kid”, attentive, friendly, and polite. You know about his friends and his family, his activities and his interests, his grades and his religion. And you know about the end of his previous relationship. But one day, you hear rumors going around that he was convicted of first degree murder of another classmate, his ex-girlfriend, to be exact. This could never happen, right? Well, in Baltimore, Maryland, this was a reality for many students attending Woodlawn High School in 1999. However, his trial did not provide sufficient evidence to incriminate him.…

    • 1468 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    ACC 300 Final Exam

    • 1412 Words
    • 7 Pages

    12. All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.…

    • 1412 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    In 1901, the founder, John W. Nordstrom, started Nordstrom as a small shoe store in Seattle Washington. In 1963, Nordstrom spread their business to the clothing market. Today, Nordstrom is leading the industry of fashion retail in the U.S. employing 49,700 full-time employees. They also operate two other sub segments: indirect selling such as e-commerce and catalogs, and credit operation. Plus, they provide restaurant and spa services in many of their retail locations. In 2005, Nordstrom operates 152 stores including 95 full-line stores, 49 Nordstrom Racks, five boutiques, one shoe store, and two clearance stores in the U.S. Nordstrom offers shoes, clothing, accessories, handbags, jewelry, cosmetics fragrances and in some…

    • 794 Words
    • 4 Pages
    Powerful Essays
  • Satisfactory Essays

    Acc 225 Week 4 Checkpoint

    • 454 Words
    • 2 Pages

    List the steps in preparing a work sheet in their proper order by writing numbers 1 – 5 in the blank spaces provided.…

    • 454 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    | | Final Project ACC-101 | | Comprehensive Problem 2 Guitar Universe, Inc. P388 GUITAR UNIVERSER, INC. | Trial Balance | December 31,2009 | Cash | $45,000 | | Marketable securities | $25,000 | | Accounts receivable | $125,000 | | Allowance for doubtful accounts | | $5,000 |…

    • 925 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    Clarkson Lumber Case 2

    • 1236 Words
    • 4 Pages

    In order to determine how attractive it is to avail the trade discounts, Clarkson should calculate his annualized interest rate which he can get in return if he avails the trade discount. If this annualized interest rate is greater than the interest rate charged from a bank loan, then Clarkson should go for the discount. Whereas, if the interest rate to borrow the money from a bank is greater than the annualized interest rate earned by taking the discount, then Clarkson should not take the discount. We should also outline, that the best option is to pay later, but we assume that from 1996 vendors will set the deadline of payment around 30 days.…

    • 1236 Words
    • 4 Pages
    Good Essays
  • Good Essays

    and bad debts expense for the year ended December 31, 2005. Show your calculations. (12…

    • 5610 Words
    • 23 Pages
    Good Essays
  • Powerful Essays

    Final Exam

    • 1129 Words
    • 5 Pages

    Explanation: This entry simply requires you to subtract 3,000 from the 15,000 in estimated uncollectable accounts.…

    • 1129 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    Computer Consulting by Kim Smith Customer Balance Detail All Transactions Type Ahmadrand, Ela Invoice Invoice Date 12/31/2012 01/05/2013 Num 3…

    • 319 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    bio 101

    • 1216 Words
    • 24 Pages

    E8-1A. Credit Losses Based on Credit Sales (LO2) a. General Journal Date Description Debit Credit Dec. 31 Bad debts expense 9,000 Allowance for doubtful accounts 9,000 To record allowance for credit losses (0.01 x $900,000 = $9,000). b. Current Assets: Accounts receivable $150,000 Less: Allowance for doubtful accounts 19,200 $130,800 E8-2A. Credit Losses Based on Accounts Receivables (LO1, LO2) a. General Journal…

    • 1216 Words
    • 24 Pages
    Powerful Essays