Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12, Problem 3PSB
Summary Introduction
Concept Introduction:
To Prepare:
Full cash flow statement under indirect method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Use the following information for the Problems below.
Skip to question
[The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.
FORTEN COMPANYComparative Balance SheetsDecember 31
Current Year
Prior Year
Assets
Cash
$
58,900
$
79,500
Accounts receivable
74,830
56,625
Inventory
284,656
257,800
Prepaid expenses
1,270
2,015
Total current assets
419,656
395,940
Equipment
151,500
114,000
Accum.…
Use the following information for the Problems below.
Skip to question
[The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.
FORTEN COMPANYComparative Balance SheetsDecember 31
Current Year
Prior Year
Assets
Cash
$
58,900
$
79,500
Accounts receivable
74,830
56,625
Inventory
284,656
257,800
Prepaid expenses
1,270
2,015
Total current assets
419,656
395,940
Equipment
151,500
114,000
Accum.…
Chicken Wings Company is engaged in buying and selling of office equipment which caters both cash and on account sales to customers. The following are the transactions that affect accounts receivable during 2021:Sales (cash and on account), P715,171; Cash received from cash customers, P243,297; Cash received from credit customers (340,373 was received from customers who took advantage of the discount feature of the company’s credit term 3/10, n/30, P368,760; Accounts written of as worthless, P5,996; Credit memoranda issued to credit customers for sales returns and allowances, P29,250; Cash refunds given to cash customers for sales returns and allowances, P20,536; Recoveries on accounts written off as uncollectible in prior periods (not included in cash collections stated above), P8,004An aging of the receivables indicates that P20,933 of the accounts receivable balance are deemed uncollectible.The following balances were taken from the December 31, 2020 statement of financial…
Chapter 12 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 12 - What is the reporting purpose of the statement of...Ch. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Describe the direct method of reporting cash flows...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - Prob. 1QSCh. 12 - Prob. 2QSCh. 12 - Prob. 3QSCh. 12 - Prob. 4QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - Prob. 8QSCh. 12 - Prob. 9QSCh. 12 - Prob. 10QSCh. 12 - Prob. 11QSCh. 12 - Prob. 12QSCh. 12 - Prob. 13QSCh. 12 - Refer to the data in QS 12-11. How much cash is...Ch. 12 - Prob. 15QSCh. 12 - Prob. 16QSCh. 12 - Prob. 17QSCh. 12 - Prob. 18QSCh. 12 - Prob. 19QSCh. 12 - Prob. 21QSCh. 12 - The following transactions and events occurred...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Prob. 17ECh. 12 - Prob. 18ECh. 12 - Prob. 19ECh. 12 - Prob. 1PSACh. 12 - Prob. 2PSACh. 12 - Prob. 3PSACh. 12 - Prob. 4PSACh. 12 - Prob. 5PSACh. 12 - Golden Corp., a merchandiser, recently completed...Ch. 12 - Prob. 7PSACh. 12 - Prob. 8PSACh. 12 - Prob. 1PSBCh. 12 - Prob. 2PSBCh. 12 - Prob. 3PSBCh. 12 - Prob. 4PSBCh. 12 - Prob. 5PSBCh. 12 - Prob. 6PSBCh. 12 - Prob. 7PSBCh. 12 - Prob. 8PSBCh. 12 - Prob. 12SPCh. 12 - Prob. 1FSACh. 12 - Prob. 2FSACh. 12 - Prob. 3FSACh. 12 - Prob. 1BTNCh. 12 - Prob. 2BTNCh. 12 - Prob. 4BTNCh. 12 - Prob. 6BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- ABC Corporation began 2019 with an accounts receivable balance of $56,921. During 2019, ABC had sales revenue of $207,500: $35,000 of that was cash sales and $172,500 of that was credit sales. ABC wrote off $10,000 of uncollectible accounts and had payments on account of $180,000 Create a T-account for Accounts Receivable. Post the relevant information from above and calculate ABC Corporation’s Accounts Receivable balance at 12/31/19.arrow_forwardRosalie Co. uses the gross method to record sales made on credit. On June 10,2018, it made sales of P100,000 with terms 2/10, n/30 to Finley Farms, Inc. On June 19, 2018, Rosalie received payment for % the amount due from Finley Farms. Rosalie's fiscal year end is on June 30,2018. What amount will be reported in the statement of financial position for the accounts receivable due from Finley Farms, Inc. ?arrow_forwardPeru Industries began operations on January 1, 2020. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts (assume a perpetual inventory system). These transactions are summarized as follows: 2021 a. Sold merchandise on credit for $3,066,000, terms n/30 (COGS = $1,673,000). b. Wrote off uncollectible accounts receivable in the amount of $55,700. c. Received cash of $2,318,000 in payment of outstanding accounts receivable. d. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. The company uses the allowance method to account for uncollectible. Calculate: (excel) Record the sales.(point a) Record cost of sales.(point a) Record written off uncollectible accounts.(point b) Record collections from credit customers.(point c) Record the estimate for uncollectible accounts.(point d)arrow_forward
- The following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $300,000; allowance for uncollectible accounts at the beginning of the year, $25,000 (credit balance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $16,000; cash collections from customers, $1,450,000. Assuming the company estimates that future bad debts will equal 10% of the year-end balance in accounts receivable. 1. Calculate bad debt expense for the year.2. Calculate the year-end balance in the allowance for uncollectible accounts.arrow_forwardThe following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $300,000; allowance for uncollectible accounts at the beginning of the year, $25,000 (credit balance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $16,000; cash collections from customers, $1,450,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales, calculate (1) bad debt expense for the year and (2) the year-end balance in the allowance for uncollectible accounts.arrow_forwardThe following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $350,000; allowance for uncollectible accounts at the beginning of the year, $24,000 (credit balance); credit sales during the year, $1,200,000; accounts receivable written off during the year, $15,000; cash collections from customers, $1,100,000. Assuming the company estimates that future bad debts will equal 12% of the year-end balance in accounts receivable.1. Calculate bad debt expense for the year.2. Calculate the year-end balance in the allowance for uncollectible accounts.arrow_forward
- The following information relates to a company’s accounts receivable: accounts receivable balance at the beginning of the year, $300,000; allowance for uncollectible accounts at the beginning of the year, $25,000 (creditbalance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $16,000; cashcollections from customers, $1,450,000. Assuming the company estimates bad debts at an amount equal to 2% ofcredit sales, calculate (1) bad debt expense for the year and (2) the year-end balance in the allowance for uncollectible accounts.arrow_forwardDuring August 2024, Yond Company recorded the following: • Sales of $51,100 ($44,000 on account; $7,100 for cash). Ignore Cost of Goods Sold. • Collections on account, $33,800. • Write-offs of uncollectible receivables, $1,900. • Recovery of receivable previously written off, $200. Date Aug. Accounts and Explanation Debit Credit Requirements Journalize Yond's transactions during August 2024, assuming Yond uses the direct write-off method. 1. 2. Journalize Yond's transactions during August 2024, assuming Yond uses the allowance method.arrow_forwardChicken Wings Company is engaged in buying and selling of office equipment which caters both cash and on account sales to customers. The following are the transactions that affect accounts receivable during 2021:Sales (cash and on account), P591,050Cash received from cash customers, P205,175Cash received from credit customers (281,300 was received from customers who took advantage of the discount feature of the company’s credit term 3/10, n/30, P320,800Accounts written of as worthless, P4,955Credit memoranda issued to credit customers for sales returns and allowances, P26,275Cash refunds given to cash customers for sales returns and allowances, P16,972Recoveries on accounts written off as uncollectible in prior periods (not included in cash collections stated above), P6,615An aging of the receivables indicates that P17,300 of the accounts receivable balance are deemed uncollectible.The following balances were taken from the December 31, 2020 statement of financial position:Accounts…arrow_forward
- The following are excerpts from the financial statements of 2018 and 2019 of Mandela Corporation. 2019 2018 Sales $187,600 $195,000 Accounts Receivable (net): Beginning of Year 68,100 66,500 End of Year 60,200 68,100 A newly hired manager has started implementing new credit policies. Required: As a consultant, you are contracted to analyze Accounts Receivable Turnover and Number of Days’ Sales in Receivable and provide opinion as to whether Mandela’s credit policy changes are working What conclusions does your analysis suggest. Are the new credit policies working ?arrow_forwardThe Company had the following information relating to its accounts receivable: · Accounts receivable, 12/31/2020- P780,000· Credit sales during 2021- P3,290,000· Collections from customers during 2021 (excluding recovery of P20,000)- P3,640,000· Accounts written off during 2021- P85,000· Collection of accounts written off in prior years- P20,000· Estimated uncollectible accounts per aging at 12/31/2021- P63,000 At December 31, 2021, The Company's accounts receivable before allowance for uncollectible accounts should bearrow_forwardVKS Company had the following information relating to its accounts receivable: · Accounts receivable, 12/31/2020- P780,000· Credit sales during 2021- P3,290,000· Collections from customers during 2021 (excluding recovery of P20,000)- P3,640,000· Accounts written off during 2021- P85,000· Collection of accounts written off in prior years- P20,000· Estimated uncollectible accounts per aging at 12/31/2021- P63,000 At December 31, 2021, VKS Company's accounts receivable before allowance for uncollectible accounts should bearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License