Chapter 9 - Accounting

advertisement
Chapter 9
Exercises
Accounting for Receivables
Percent of Sales
•
In-Class Exercise:
Exercise No.
9-4
Page
382
Percent of Sales Method
Percent of Sales Method
Exercise 9-4 (Percent of Sales Method)
At year-end (December 31), Alvare Company estimates its bad debts as 0.5% of its annual
credit sales of $875,000. Alvare records its Bad Debts Expense for that estimate.
On the following February 1, Alvare decides that the $420 account of P. Coble is
uncollectible and writes it off as a bad debt.
On June 5, Coble unexpectedly pays the amount previously written off.
Prepare the journal entries of Alvare to record these transactions and events of December
31, February1, and June 5.
Percent of Sales Method
Percent of Accounts Receivable
•
In-Class Exercise):
Exercise No.
9-5
Page
382
Percent of Accounts Receivable
Method
Percent of Accounts Receivable Method
Exercise 9-5 (Percent of Receivables Method)
At each calendar year-end, Cabool Supply Co. uses the percent of accounts receivable
method to estimate bad debts.
On December 31, 2011, it has outstanding accounts receivable of $53,000, and it estimates
that 4% will be uncollectible.
Prepare the adjusting entry to record bad debts expense for year 2011 under the
assumption that the Allowance for Doubtful Accounts has:
(a) a $915 credit balance before the adjustment, and
(b) a $1,332 debit balance before the adjustment.
Percent of Accounts Receivable Method
(
Aging of Accounts Receivable
•
In-Class Exercise:
Exercise No.
9-6
Page
379
Aging of Accounts Receivable
Method
Aging of Accounts Receivable Method
Exercise 9-6 (Aging of Receivables Method)
Hecter Company estimates uncollectible accounts using the allowance method at
December 31. It prepared the following aging of receivables analysis.
Total
Accounts receivable……190,000
Percent uncollectible…..
Days Pas Due
1 to 30
31 to 60
61 to 90
Over 90
$132,000
$30,000
$6,000
$10,000
1%
2%
0
$12,000
4%
7%
12%
(a) Estimate the balance of the Allowance for Doubtful Accounts using the aging of
accounts receivable method.
(b) Prepare the adjusting entry to record Bad Debts Expense using the estimate from
Part (a). Assume the unadjusted balance in the Allowance for Doubtful Accounts is
a $600 credit.
(c) Prepare the adjusting entry to record Bad Debts Expense using the estimate from
Part (a). Assume the unadjusted balance in the Allowance for Doubtful Accounts is
a $400 debit.
.
.
Aging of Accounts Receivable Method
Aging of Accounts Receivable Method
Notes Receivable
• In-Class Exercise:
Exercise No.
9- 13
Page
384
Notes Receivable
Transactions
Notes Receivable
Exercise 9-13
Prepare journal entries for the following selected transactions of Deshawn Company for
2010.
2010
Dec. 13 Accepted a $10,000, 45-day, 8% note dated December 13 in granting Latisha Clark
a time extension on her past-due accounts receivable.
31 Prepared an adjusting entry to record the accrued interest on the Clark note.
Notes Receivable
Notes Receivable
• In-Class Exercise:
Exercise No.
9- 14
Page
384
Notes Receivable
Transactions
Notes Receivable
Interest = $10,000 x 8’% x 45/360 = $100
Maturity Value = $10,000 + $100 = $10,100
Notes Receivable
Interest Accrual from December 31
Notes Receivable
Interest = $100 - $40 = $60
or $10,000 x 8’% x 27/360 = $60
Notes Receivable
Notes Receivable
Interest = $2,000 x 9’% x 30/360 = $15
Maturity Value = $2,000 + $15 = $2,015
Notes Receivable
Notes Receivable
Interest = $4,000 x 10’% x 90/360 = $100
Maturity Value = $4,000 + $100 = $4,100
Notes Receivable
Notes Receivable
• In-Class Exercise:
Exercise No.
HO 9-1
Page
HO
Discounting a Note
(Information for the exercise is reflected on the
next chart)
Discounting Notes Receivable
Discounting Notes Receivable
Discounting Notes Receivable
Download