Part A: Justin Company has accounts receivable of 40,000. The ...

[cnetterville]

Part A: Justin Company has accounts receivable of 40,000. The allowance for uncollectible accounts has a balance of 200, a positive number, before adjustment.
 
  An aging schedule prepared December 31, 2012 estimates that 1,100 of accounts receivable are uncollectible. Show the effect of the adjusting entry on the accounting equation, including both account titles and amounts:
 
   Shareholders' equity
   Assets Liab. CC Retained earnings
 
  Part B: Jayson Company has accounts receivable of 40,000. The allowance for uncollectible accounts has a balance of (200), a negative number, before adjustment. An aging schedule prepared December 31, 2012 estimates that 1,100 of accounts receivable are uncollectible. Show the effect of the adjusting entry on the accounting equation, including both account titles and amounts:
   Shareholders' equity
   Assets Liab. CC Retained earnings

Question 2

A backlog in recording transactions is an example of a warning sign from the accounting system.
 a. True
  b. False
 
   Indicate whether the statement is true or false

[bpool94]

Answer to Question 1

Part A:
Shareholders' equity
Assets Liab. CC Retained earnings
(1,300) Allow. for uncollect. accts. (1,300) Bad debts expense

Part B:
Shareholders' equity
Assets Liab. CC Retained earnings
(900) Allow. for uncollect. accts. (900) Bad debts expense

Answer to Question 2

True