Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 4, Problem 2IE
1.
To determine
Identify the amount to be reported as trade
2.
To determine
Identify whether the company uses allowance method or direct write-off method to record the uncollectible accounts.
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Also, at what amount will accounts receivable bre reported on Lewis’s December 31 Balance Sheet (what is the Net Realizable Value of its accounts receivables)
Use the following to answer questions 16 - 19
For each transaction indicate whether it should:
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B. decrease, or
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Credit sales
transaction cycle
Asskiabilitstockholders’ equRtøvenespenses
16. Provide services on account
17. Estimate uncollectible accounts
18. Write off accounts as uncollectible
19. Collect on account previously written off
Customer deposits (prepayments) are recorded -
Select one:
a. as debits to accounts receivable for the customer
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as credits to accounts receivable for the customer
O d. when the customer makes a partial payment on account
Chapter 4 Solutions
Financial Accounting
Ch. 4 - Prob. 1YTCh. 4 - Prob. 2YTCh. 4 - Suppose at the end of the year Pendleton Corp.s...Ch. 4 - Prob. 4YTCh. 4 - Prob. 5YTCh. 4 - Prob. 6YTCh. 4 - Prob. 7YTCh. 4 - Prob. 1QCh. 4 - Prob. 2QCh. 4 - Prob. 3Q
Ch. 4 - Prob. 4QCh. 4 - What does true cash balance refer to?Ch. 4 - Identify and explain the financial statements on...Ch. 4 - Describe how accounts receivable arise. What does...Ch. 4 - Prob. 8QCh. 4 - Define net realizable value, book value, and...Ch. 4 - Explain the difference between the direct...Ch. 4 - If a company uses the allowance method of...Ch. 4 - Describe the two allowance methods used to...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - What are the advantages and disadvantages of...Ch. 4 - What is the difference between accounts receivable...Ch. 4 - What is the formula to calculate the accounts...Ch. 4 - How does a firm use its accounts receivable...Ch. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 1SEACh. 4 - Prob. 2SEACh. 4 - Prob. 3SEACh. 4 - Prob. 4SEACh. 4 - Prob. 5SEACh. 4 - Prob. 6SEACh. 4 - Prob. 7SEACh. 4 - Prob. 8SEACh. 4 - Prob. 9SEACh. 4 - Prob. 10SEBCh. 4 - Prob. 11SEBCh. 4 - Prob. 12SEBCh. 4 - Prob. 13SEBCh. 4 - Prob. 14SEBCh. 4 - Prob. 15SEBCh. 4 - Prob. 16SEBCh. 4 - Prob. 17SEBCh. 4 - Prob. 18SEBCh. 4 - Prob. 19EACh. 4 - Prob. 20EACh. 4 - Prob. 21EACh. 4 - Prob. 22EACh. 4 - Prob. 23EACh. 4 - Prob. 24EACh. 4 - Prob. 25EACh. 4 - Prob. 26EACh. 4 - Prob. 27EACh. 4 - Prob. 28EACh. 4 - Prob. 29EACh. 4 - Prob. 30EACh. 4 - Prob. 31EACh. 4 - Prob. 32EBCh. 4 - Prob. 33EBCh. 4 - Prob. 34EBCh. 4 - Prob. 35EBCh. 4 - Prob. 36EBCh. 4 - Prob. 37EBCh. 4 - Prob. 38EBCh. 4 - Prob. 39EBCh. 4 - Prob. 40EBCh. 4 - Prob. 41EBCh. 4 - Prob. 42EBCh. 4 - Prob. 43EBCh. 4 - Prob. 44EBCh. 4 - Prob. 45PACh. 4 - Prob. 46PACh. 4 - Prob. 47PACh. 4 - Prob. 48PACh. 4 - Prob. 49PACh. 4 - Prob. 50PACh. 4 - Prob. 51PACh. 4 - Prob. 52PACh. 4 - Prob. 53PBCh. 4 - Prob. 54PBCh. 4 - Prob. 55PBCh. 4 - Prob. 56PBCh. 4 - Prob. 57PBCh. 4 - Prob. 58PBCh. 4 - Prob. 59PBCh. 4 - Prob. 60PBCh. 4 - Prob. 1FSACh. 4 - Prob. 2FSACh. 4 - The following information has been adapted from...Ch. 4 - Prob. 1CTPCh. 4 - Prob. 2CTPCh. 4 - The information given here was taken from Yahoo!...Ch. 4 - Prob. 1IECh. 4 - Prob. 2IECh. 4 - The information given here was taken from Yahoo!...
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- Will an accounts receivable balance increase with a debit or a credit entry? How do you know?arrow_forwardWhy should a company have clear strategy for collecting Accounts receivable from its customers? For example, some companies do offer discounts to customer for early payment instead collecting the full amount at the due date.arrow_forwardAn “Accounts Receivable Customer Balances” report shows revenues by customer for a specified date range customer balances owed as of a specific date cash payments to creditors for a specific date range sales by customer as of a specific datearrow_forward
- b. Assume that Joey's Bike Shop uses the direct write-off method of accounting for uncollectible accounts. Answer the following questions: (1) What is the Accounts Receivable balance at December 31, Year 1? (2) What is the amount of uncollectible accounts expense for Year 1? (3) What is the net realizable value of accounts receivable at December 31, Year 1?arrow_forward1. Which of the following is correct when a company uses the net price method of recording receivables? a. The company records the total invoice price in both the "Accounts Receivable" and "Sales" accounts at the time of sale as if no cash discount is involved b. Sales discount taken is deducted from sales on the income statement to determine net sales c. Cash discount is reflected in the accounting records only when the discount is taken d. Cash discount is reflected in the accounting records only when the discount is not taken e. none of the abovearrow_forwarda. Show the journal entry to record the uncollectible accounts. b. How much will the balance sheet show as the net realizable value of the accounts receivablearrow_forward
- At what net realizable value should the accounts receivable – trade be carried as of December 31? Please include solutions. Thank you!arrow_forwardIf the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? a.Interest expense b.Allowance for doubtful accounts c.Uncollectible accounts expense d.Accounts receivablearrow_forward1. What is the adjusting entry for the doubtful accounts expense for the current year? 2. What is the net realizable value of accounts receivable at year-end? Please include solutions with the answers. Thank you!arrow_forward
- 2.Which of the following statements is valid? a. Net accounts receivable is not affected by a recovery of an account previously written off. b. A three year, non-interest bearing promissory note is initially recorded in the accounts at its face value. c. When individual customers' accounts have credit balances of material amounts, these amounts must be deducted from the debit balance in other customers' accounts in the statement of financial position. d. When the rate stated on a note is greater than the prevailing market rate of interest for similar obligations, the present value of the note at initial recognition is greater than its face value.arrow_forwardWhen a customer pays in advance for products or services, which of the following accounts is credited? a.Sales Revenue b.Cash c.Unearned Revenue d.Accounts Receivablearrow_forward4. If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? a. Uncollectible Accounts Expense b. Accounts Receivable c. Allowance for Doubtful Accounts d. Interest Expense 5. On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $20,000 face value and 6% interest. On October 30, the journal entry to - record the collection of the note should include a a. credit to Notes Receivable for $20,300 b. debit to Interest Receivable for $300 c. credit to Interest Revenue for $300 d. debit to Notes Receivable for $20,000 6. The receivable that is usually evidenced by a formal, written instrument of credit is a(n) a. trade receivable b. note receivable c. accounts receivable d. income tax receivablearrow_forward
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