3. The Folly and Frill company is in the process of liquidation.On January 1, 2011, the general ledger shows the account balances as follows:Cash $10,000Accounts payable 15,000Accounts receivable 25,000Folly Capital 40,000Lumber inventory 40,000Frill Capital 20,000-On January 10, 2011, lumber inventory sells for $25,000-During January, only $21,000 of accounts receivable was collected. No more charges are expected.-Profits are shared 60 percent with Folly and 40 percent with Frill.Prepare a worksheet that shows the details of the liquidation process as of February 1, 2011. Determinethe final balance of each partner's capital accounts.

We start with the given balances on January 1, 2011.Next, it says that lumber inventory sells for…

Answered: 3. The Folly and Frill company is in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The ace company completed the following transactions during 2020. Jan 10 sold inventory to Natty Paul, $11,000, on account May 15 wrote off as uncollectible the accounts of Terry Carter, $2,500 and Maggie Cube $400 August 04 received 70% of the amount owed by Natty Paul and wrote off the remainder as uncollectible October 26 received 30% of the funds owed from Maggie Cube as part payment of her account which had been written off earlier as uncollectible. December 31, The Aging schedule showed an estimated $116,500 as uncollectible Requirements: Prepare journal entries for each transaction (No narrations required) Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account. Prepare the balance sheet extract as at Dec 31, 2020, to show the net realizable value for the Accounts Receivable. Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be…
Lynch, Inc., is a hardware store operating in Boulder, Colorado. Management recently made some poor inventory acquisitions that have loaded the store with unsalable merchandise. Because of the drop in revenues, the company is now insolvent. The entire inventory can be sold for only $33,000. Following is a trial balance as of March 14, 2017, the day the company files for a Chapter 7 liquidation:Company officials believe that 60 percent of the accounts receivable can be collected if the company is liquidated. The building and land have a fair value of $75,000, and the equipment is worth $19,000. The investments represent shares of a nationally traded company that can be sold at the current time for $21,000. Administrative expenses necessary to carry out a liquidation would approximate $16,000.Prepare a statement of financial affairs for Lynch, Inc., as of March 14, 2017.
The financial records of DISGRASYA Inc. were destroyed by fire at the end of 2020. Selected information gathered are the following: Inventory on January 1 was P92,000 and decreased by 20% during the year. Sales discount amounted to P17,000. Interest expense is P20,000. Cost of sales is P500,000. Administrative expenses amounted to 20% of cost of sales but only 8% of gross sales. Two thirds of operating expenses relate to sales activities. The company is subject to 30% income tax. How much is the net income (net loss) during 2020? *
The financial records of AGRIGASYA Inc. were destroyed by fire at the end of 2020. Selected information gathered are the following: Inventory on January 1 was P92,000 and decreased by 20% during the year. Sales discount amounted to P17,000. Interest expense is P20,000. Cost of sales is P500,000. Administrative expenses amounted to 20% of cost of sales but only 8% of gross sales. Two thirds of operating expenses relate to sales activities. The company is subject to 30% income tax. How much is the net income (net loss) during 2020?
The financial records of Dream Inc. were destroyed by fire at the end of 2020. Selected information gathered are the following: Inventory on January 1 was P92,000 and decreased by 20% during the year. Sales discount amounted to P17,000. Interest expense is P20,000. Cost of sales is P500,000. Administrative expenses amounted to 20% of cost of sales but only 8% of gross sales. Two thirds of operating expenses relate to sales activities. The company is subject to 30% income tax. How much is the net income (net loss) during 2020?
On March 17, 2021, a flood destroyed the entire inventory of Beatty Co. The following information is available from its accounting records: Inventory, January 1, 2021 $ 208,000 Purchases, Jan. 1 — Mar. 17 420,000 Sales, Jan. 1 — Mar. 17 600,000 Normal gross margin 40% Required:Compute the estimated cost of inventory lost in the flood.
Wormold Industries suffered a fire in its warehouse on March 4, 2021. The warehouse was fullof finished goods, and after reviewing the damage, management determined that inventory,with a retail selling price of $90,000, was not damaged by the fire.For the period from January 1, 2021, to March 4, 2021, accounting records showed thefollowing: Purchases $650,000Purchase returns 16,000Sales revenue 955,000 The inventory balance on January 1, 2021, was $275,000, and the company has historicallyearned a gross profit percentage of 35%.Required: Use the gross profit method to determine the cost of inventory damaged by the fire.
Nectarine Company lost most of its inventory in a fire in December, 2021, just before the year-end physical inventory was taken. The company’s books disclosed the following:Invy, 1/1/21 - 1,700,000Purchases - 3,900,000 Purchase return - 300,000Sales - 6,500,000 Sales returns - 240,000Merchandise costing P126,000 remain undamaged after the fire. Damaged merchandise with an original selling price of P150,000 had a net realizable value of P53,000. A partial comparative profit and loss for 2020 and 2019 also disclosed the following:2020: Sales - 5,000,000; CGS - 3,025,0002019: Sales - 5,600,000; CGS - 3,332,000Assuming that Nectarine Company had no insurance coverage, what is the amount of loss as a result of the fire?
BBM Company lost most of its inventory in a fire in December, 2021, just before the year-end physical inventory was taken. The company’s books disclosed the following:Invy, 1/1/21 - 1,700,000Purchases - 3,900,000 Purchase return - 300,000Sales - 6,500,000 Sales returns - 240,000Merchandise costing P126,000 remain undamaged after the fire. Damaged merchandise with an original selling price of P150,000 had a net realizable value of P53,000. A partial comparative profit and loss for 2020 and 2019 also disclosed the following:2020: Sales - 5,000,000; CGS - 3,025,0002019: Sales - 5,600,000; CGS - 3,332,000Assuming that BBM Company had no insurance coverage, what is the amount of loss as a result of the fire?
On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its inventory. The following information is presented for 2020: January 1 December 31Inventory P 750,000Accounts Receivable 510,000 P 490,000Accounts Payable 350,000 590,000Collection on accounts receivable 3,100,000Payment to suppliers 1,950,000Goods out on consignment at sales price 310,000Salvage value of inventory 45,0002019 2018 2017Sales P3,000,000 P2,750,000 P2,100,000Gross Profit 1,200,000 1,045,000 756,000Requirements: Compute the following on December 31, 20201. Purchases2. Sales3. Inventory Loss
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…

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