prepare journal entries to record the foregoing on your set of books include appropr 615339
Trustee Accounting
TRX Company has been forced into receivership, and you have been appointed trustee. You decide to open your own set of books in order to distinguish more clearly between transactions occurring before and after your appointment. The following account balances were reported on September 1, 2012:
Cash |
$ 26,700 |
|
Accounts Receivable |
130,400 |
|
Inventory |
191,900 |
|
Property and Equipment |
590,400 |
|
Total |
$939,400 |
|
Allowance for Uncollectibles |
$ 16,000 |
|
Accumulated Depreciation |
211,500 |
|
Accounts Payable |
308,400 |
|
Capital Stock |
800,000 |
|
Retained Earnings (deficit) |
(396,500) |
|
Total |
$939,400 |
In the four months immediately after your appointment, the following transaction occurred:
- Sales were made in the amount of $296,000, of which $31,500 were cash sales.
- Receivables were collected in the following amounts:
Old receivables |
$ 76,800 |
|
New receivables |
242,200 |
3 Additional inventory was purchased on account in the amount of $127,500.
4 Cash payments were made as follows:
On old accounts payable |
$206,500 |
|
On new accounts payable |
61,600 |
|
For operating expenses |
46,000 |
|
For trustee fees |
13,000 |
- Journal entries were made to record:
(a) Bad debt expense of $21,600, of which $8,600 related to new accounts receivable.
(b) Depreciation expense of $32,400.
(c) Write-off of old accounts receivable of $21,000.
The inventory balance at the end of your first four months as trustee (the end of the fiscal year for TRX Company) was $149,700.
Required:
Prepare journal entries to record the foregoing on your set of books. Include appropriate closing entries.