Accounting Principles Third Canadian Edition Chapter 8 Answers

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Date 2007 Dec. 31 31 2008 May 11 June 12. Date July 1 1 31 31. Re: Management of the credit function. The accounting principles central to an income statement perspective are the revenue recognition and matching principles. July 25 Allowance for doubtful accounts...... Notes Receivable-Avery................ Accounting principles third canadian edition chapter 8 answers.com. Sept. 1. The data contained in these files are protected by copyright. The first entry is made to reverse the write-off of the account receivable. Continuing Cookie Chronicle BYP8-3.

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PROBLEM 8-9B (Continued) (c) Notes Receivable Explanation Ref. Because the note is a formal credit instrument, its recorded value stays the same as its face value. 10, 11, 12, 13 13, 14, 15.

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Also, no interest would be accrued for October. In this case notes receivable due in three months would be disclosed first followed by net accounts receivables (accounts receivable less the allowance for doubtful accounts) and finally other receivables which would include sales taxes recoverable and income taxes receivable. If reporting periods were not divided into equal portions of time, then a business's financial statement could not be compared to a previous one. Accounting principles third canadian edition chapter 8 answers.yahoo. BRIEF EXERCISE 8-7 Number of Days Outstanding 0-30 days 31-60 days 61-90 days Over 90 days Total.

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1, 195 ÷ $1, 409 = 0. 25%)................................... 24, 375 Allowance for Doubtful Accounts......... 24, 375. Neither could the performance of one business be compared to the performance of another. Estimated uncollectibles are debited to Bad Debts Expense and credited to Allowance for Doubtful Accounts through an adjusting entry at the end of each period. 6, 000 x 6% x 1/12 = $ 30 $10, 000 x 5. Date Jan. 1 1 2 3 4 5 5. Estimated Uncollectible Accounts $ 3, 150 3, 600 6, 000 7, 000 $19, 750. This will provide more accurate information about the customer in case the customer wants to receive credit again in the future. Accounting principles third canadian edition chapter 8 answers.unity3d.com. 25% of $1, 950, 000 net credit sales). 2) Actual uncollectibles are debited to Allowance for Doubtful Accounts and credited to Accounts Receivable at the time a specific account is written off.

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In order to determine if the increase is an improvement in financial health, other ratios that should be considered include: Quick ratio, receivable turnover and collection period; inventory turnover and days sales in inventory ratios. The disadvantage is the cost to your business. Under the percentage of receivables approach, the balance in the allowance for doubtful accounts is derived either (a) by applying a percentage estimate of bad debts to total receivables or (b) from an analysis of individual customer accounts. 25% x $800, 000].... 18, 000 Allowance for Doubtful Accounts......... (d) Date. Other receivables This is not a receivable. Cost of Goods Sold............................ 9, 000 Inventory......................................... BYP 8-2 INTERPRETING FINANCIAL STATEMENTS (a) ($ in thousands). B) June 1 Accounts Receivable...................... Interest Receivable at September 30, 2008. Bad debts expense Balance August 31.................................................. $ 85, 680 September entry...................................................... 10, 743 October entry........................................................... 26, 286 Total expense for the year...................................... $122, 709.

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72, 500 (e) 45, 500 79, 600. The reasons companies sometimes sell their receivables are: (1) For competitive reasons, sellers often must provide financing to purchasers of their goods for extended periods. Sales Returns and Allowances......... Accounts Receivable..................... (c) Sep. 30 Accounts Receivable......................... Interest Revenue........................... [($20, 000 - $3, 500) x 21% x 1/12] (d) Oct. 4. Amount $137, 000 61, 000 38, 000 24, 000 $260, 000% 1. C) Interest 2008 $16, 000 x 7. BRIEF EXERCISE 8-13 (a) 2007 July 1. 5% x 1/12 = 46 MJH Corp. $ 9, 000 x 5% x 1/12 = 38 Total $114. 29 Cash........................................... Credit Cards Receivable...... 31 Credit Cards Receivable........... Interest Revenue................... 325. Accounts and notes receivable are sometimes called trade receivables because they result from sales transactions and occur in the normal course of business operations. 38, 500 [($42, 000) - $3, 500]. If Imagine Co. used 3% of accounts receivable rather than aging the accounts, the adjustment would be $21, 550 [($385, 000 x 3%) + $10, 000]. 2 Notes Receivable—Mathias Co......... 4, 000 Accounts Receivable—Mathias Co. Apr.

It may be more relevant for the company to determine a percentage of receivables that it deems doubtful each year and adjust the balance in the doubtful accounts by recognizing a bad debts expense annually. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Explanation Sales Return Sales. The write-off of an uncollectible account does not affect the net realizable value of accounts receivable. A dishonoured note is a note that is not paid in full at maturity. 30 Note Receivable—Lesperance...... Accounts Receivable.................. 1, 050 566 566. This has occurred because both accounts receivable and inventory have increased over the three year period and has resulted in the operating cycle weakening from 84.