Matakuliah
Tahun
: V0232 – Akuntansi Keuangan Hotel
: 2009
Hospitality Financial Accounting
Week 10
Accounting for Receivables
12-1 Percentage of Sales Method
Balance of Selected Accounts at Year-End
(Before Adjustment)
Allowance for Doubtful Accounts
Accounts Receivable
Sales
150
45,600
150,000
Based on past experience, it is estimated that 2% of net sales will become uncollectible. ($150,000 X .02) = $3,000.
ADJUSTING ENTRY TO RECORD BAD DEBTS EXPENSE
Bad Debts Expense
3,000
Allowance for Doubtful Accounts
3,000
Balance of Selected Accounts at Year-End
(After Adjustment)
Allowance for Doubtful Accounts
Accounts Receivable
45,600
150
3,000
Sales
150,000
3,150
SALES
$150,000
EMPHASIS ON INCOME
STATEMENT RELATIONSHIPS
BAD DEBTS EXPENSE
$3,000
12-2 Percentage of Receivables Method
Balance of Selected Accounts at Year-End
(Before Adjustment)
Allowance for Doubtful Accounts
Accounts Receivable
Sales
150
45,600
150,000
AGING SCHEDULE
Number of Days Past Due
Customer
Total
R. Albert
Not Yet Due
$500
1-30
31-60
$300
61-90
$100
Over 90
$100
G. Conner
600
S. Davis
300
B. Gordon
900
T. Haig
800
Others
42,500
27,800
7,500
2,500
2,700
2,000
$45,600
$28,900
$8,000
$3,100
$3,200
$2,400
2%
4%
10%
20%
40%
$578
$320
$310
$640
$960
Estimated Percentage Uncollectible
Total Estimated Bad Debt
Note:
$2,808
$600
200
500
Adjusting entry amount
400
500
Required balance in Allowance account per aging schedule
Credit balance in Allowance account
$100
300
$2,808
150
$2,658
12-2 Percentage of Receivables Method
(continued)
ADJUSTING ENTRY TO RECORD BAD DEBTS EXPENSE
Bad Debts Expense
2,658
Allowance for Doubtful Accounts
2,658
Balance of Selected Accounts at Year-End
(After Adjustment)
Allowance for Doubtful Accounts
Accounts Receivable
45,600
150
2,658
Sales
150,000
2,808
EMPHASIS ON BALANCE
SHEET RELATIONSHIPS
ACCOUNTS
RECEIVABLE
ALLOWANCE FOR
DOUBTFUL ACCOUNTS
$45,600
$2,808
12-3 Percentage of Sales vs. Percentage of
Receivables Methods
PERCENTAGE OF SALES METHOD
PERCENTAGE OF RECEIVABLES METHOD
ADJUSTING ENTRY
Bad Debts Expense
3,000
Doubtful Accounts
Bad Debts Expense
3,000
Allowance for Doubtful Accounts
2,658
Allowance for Doubtful Accounts
2,658
Allowance for Doubtful Accounts
150
3,000
3,150
150
2,658
Amount Determined
From Net Sales
2,808
Balance of Amount
Determined From
Aging Schedule
If the Allowance account had a $150 debit balance before adjustments, the adjusting entry using the percentage of sales
method would not change. If the percentage of receivables method is used, the adjusting entry would have to take into
consideration the debit balance in the Allowance account by adding the debit balance to the required Allowance account
balance obtained from the aging schedule.
ADJUSTING ENTRY
Bad Debts Expense
3,000
Allowance for Doubtful Accounts
Bad Debts Expense
3,000
Allowance for Doubtful Accounts
2,958
Allowance for Doubtful Accounts
($150 + $2,808 = $2,958)
2,958
Allowance for Doubtful Accounts
150
3,000
150
2,658
3,150
2,808
12-4 Sales of Receivables
1. SALE OF RECEIVABLES TO A FACTOR
EXAMPLE:
A company sells $800,000 of its receivables to a finance company that charges a
Cash
784,000
Service Charge Expense
16,000
Accounts Receivable
800,000
2. NATIONAL CREDIT CARD SALES
EXAMPLE:
A customer purchases goods for $500 using a VISA card. The retailer deposits the
bank charges a 3% fee.
Cash
485
Service Charge Expense
Accounts Receivable
15
500
12-5 Maturity Date of Note
DATE OF NOTE
TERMS OF NOTE STATED IN
MATURITY DATE
MONTHS
July 1
3 Months
October 1
February 28
4 Months
June 30
September 15
2 Months
November 15
DAYS
August 11
60 Days
Aug. (31-11)
September
October
March 4
20
30
10
60
90 Days
Mar. (31-4)
April
May
June
May 14
October 10
June 2
27
30
31
2
90
120 Days
May (31-14)
June
July
August
September
September 11
17
30
31
31
11
120
12-6 Disposition of Notes Receivable
1. NOTE IS HONORED
A $20,000, 8%, 3-month note is collected at maturity.
Cash
20,400
Notes Receivable
20,000
Interest Revenue
($20,000 X .08 X 3/12) = $400
400
2. NOTE IS DISHONORED
A $20,000, 8%, 3-month note is dishonored at maturity.
Entry if collection is ultimately expected.
Accounts Receivable
20,400
Notes Receivable
20,000
Interest Revenue
400
Entry if collection is not anticipated.
Allowance for Doubtful Accounts
Notes Receivable
20,000
20,000
12-7 Interest Bearing Notes
October 1, 2008
Four months after the above date, I agree to pay
$10,000 to City National Bank with interest at the rate
of 9% per annum.
Ed Ryon Company
Oct. 1
Financial Statements at December 31
Income Statement
Interest expense
225
Balance Sheet
Notes payable
Interest Payable
Cash
10,000
225
10,225
10,000
Notes Payable
10,000
Recording cash received from note
Feb. 1
Dec. 31
Interest Expense
$10,000 X 9% X 3/12 = $225
Recording three months interest expense
10,000
Interest Expense
75
Interest Payable
225
Cash
225
Interest Payable
Notes Payable
225
$10,000 X 9% X 1/12 = $75
Recording the interest expense and payment of note and interest
10,300