Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 7.23E
To determine
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
To prepare: The
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Exercise 6-12 (Algo) Time value of money for accounts receivable [LO6-6]
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2021, and Arctic
received a note from Seneca indicating that Seneca will pay Arctic $45,800 on a future date. Unless informed otherwise, assume that
Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 8%. (FV of
$1. PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Assume the note indicates that Seneca is to pay Arctic the $45,800 due on the note on December 31, 2021. Prepare the journal
entry for Arctic to record the sale on January 1, 2021.
2. Assume the same facts as in requirement 1, and prepare the journal entry for Arctic to record collection of the payment on
December 31, 2021.
3. Assume instead that Seneca is to pay Arctic the $45,800 due on the note on…
Problem 16
Lozano Company sells a portfolio of short-term accounts receivable with a carrying amount of
P900,000 for P1,000,000 and promises to pay up to P30,000 to compensate the buyer if and
when any defaults occur. Lozano Company neither transfers nor retains substantially all the
risks and rewards of ownership of the transferred asset, and retains control of the transferred
asset.
20. How much should be recognized as continuing involvement in the receivables?
Problem 22
In its December 31, 2022 statement of financial position, Reederei Company reported receivables of P250,000 and related allowance for uncollectibility of P20,000. Such receivables are in litigation and the cost of litigation is 20% of the receivables. At December 31, 2022, it is reasonably possible that Beirut Company will not be able to collect on the receivables after litigation.
What is the total amount of risk of accounting loss related to Reederei’s receivables?
What is the total amount of off balance sheet risk related to Reederei’s receivables?
Chapter 7 Solutions
Intermediate Accounting, 10 Ed
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20QCh. 7 - Prob. 7.21QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BECh. 7 - Prob. 7.25BECh. 7 - Prob. 7.26BECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.23ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29ECh. 7 - Prob. 7.36ECh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.1DMPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMPCh. 7 - Prob. 7.6DMPCh. 7 - Prob. 7.9DMP
Knowledge Booster
Similar questions
- Problem 8-23 (Algo) Bank loan to take cash discount [LO8-1, 8-2] The Reynolds Corporation buys from its suppliers on terms of 3/16, net 60. Reynolds has not been utilizing the discounts offered and has been taking 60 days to pay its bills. Ms. Duke, Reynolds Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of 21 percent. The bank requires a 22 percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement. a. Calculate the cost of not taking a cash discount. Note: Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Cost of not taking a cash discount % b. What is the effective rate of interest on the bank loan? Note: Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2…arrow_forwardPROBLEM 5: CLASSROOM ACTIVITIES ACTIVITY #1: BANK RECONCILIATION INSTRUCTIONS: 1. Find a study partner. 2. Imagine that you of you is thė accountant of ABC Co. and the other one is the accountant of PIGGY Bank. and your study partner are accountants. One 3. Answer the requirements below. Requirement (A): Record the transactions below in your respective company's books. Transactions during the period: a. ABC Co. opened an account with PIGGY Bank.for an initial deposit of P1,000,000. b. ABC Co. draws checks amounting to P254,321. PIGGY Bank encashes ABC's checks amounting to P220,320. 000 C.arrow_forwardLO6-4,LO6-5 E 6-5 Performance obligations LO6–2, On March 1, 2024, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified l-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry Gold Examiner would record on March 1. 3. Prepare the journal entry Gold Examiner would record on March 30. 4. Prepare the journal entry Gold Examiner would record on April…arrow_forward
- Exercise 7-4 (Algo) Direct write-off method LO P1 Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $10,000 of its accounts receivable from Leer Company. March 29 Leer Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above transactions.arrow_forwardQuestion 4 On January 1, 2019, Madira Company loaned $216,374 to Virginia Company. A zero-interest- bearing note (face amount, $288,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2021. The prevailing rate of interest for a loan of this type is 10% . The present value of $288,000 at 10% for three years is $216,374. What is the book value (carrying amount) of the note on Virginia's balance sheet on December 31st, 2019 (round to the nearest dollar)? Question 5 The cost of issuing common stock should be reported in Accumulated Other Comprehensive Income in the balance sheet deducted from the Paid-in Capital in Excess of Par account charged to the income statement as an expense in the year the stock is issued None of these statements is correct Question 6arrow_forwardQuestion 16 of 16 If company records show a balance of $1,500, not including a $35 bank service fee and a $250 NSF cheque that the company did not receive the funds for, what would be the reconciled amount? Adjusted Balance: $arrow_forward
- MC49 The following bank reconciliation is presented for the Pony Co. for the month of November, 2020: Balance per bank statement, 11/30/2020 P180,400 Add: Deposit in transit P41,500 Erroneous bank charge 15,500 56,500 Subtotal P236,900 Less: Outstanding Checks 78,200 Balance per books, 11/30/2020 P158,700 Data for the month of December 2020 follow: Per bank: December deposits/credits — P261,000 December charges/debits — P224,200 Balance, December 31, 2020 — P217,200 All items that were outstanding as of November 30 cleared through the bank in December, including the bank charge. In addition, P25,000 checks were outstanding as of December 31, 2020. What is the amount of cash disbursements per books in December 2020? (WITH SOLUTION) a. P146,000 b. P171,000 c. P249,200 d. P249.200arrow_forwardMC51 The following bank reconciliation is presented for the Pony Co. for the month of November, 2020: Balance per bank statement, 11/30/2020 P180,400 Add: Deposit in transit P41,500 Erroneous bank charge 15,500 56,500 Subtotal P236,900 Less: Outstanding Checks 78,200 Balance per books, 11/30/2020 P158,700 Data for the month of December 2020 follow: Per bank: December deposits/credits — P261,000 December charges/debits — P224,200 Balance, December 31, 2020 — P217,200 All items that were outstanding as of November 30 cleared through the bank in December, including the bank charge. In addition, P25,000 checks were outstanding as of December 31, 2020. What is the amount of cash balance per books in December 2020? (WITH SOLUTION) a. P257,200 b. P242,200 c. P207,200 d. P192,200arrow_forwardLO5 P7-4A Bank Reconciliation on July 31, Arthur Company’s Cash in Bank account had a balance of $8,112.62. On that date, the bank statement indicated a balance of $10,170.62. A comparison of returned checks and bank advices revealed the following: Deposits in transit July 31 amounted to $3,316.12 2. Outstanding check July 31 totaled $1,251.12 3. The bank erroneously charged a $215 check of Solomon Company against the Arthur bank account A $15 bank service charge has not yet been recount Arthur Company Arthur neglected to record $4,000 borrowed from the bank on a 10 percent six-month note. The bank statement shows the $4,000 as a deposit Included with the returned check is a memo indicating that J.Martin’s check for $610 had been returned NSF. Martin, a customer, has sent the check to pay an account of $660 less a $50 discount Arthur company recorded a $107 payment for repairs as $1,070 Required a. Prepare a bank reconciliation for Arthur Company at July 31arrow_forward
- Problem 3 On February 1, 2020 Kaw Tan Company casually factored receivables with a carrying value of P500,000 to Kring Krong. Kring Krong assessed 3% of the total receivables as finance charge and retains 5% of the uncollected factored accounts for any adjustment and returns in any excess. Kaw Tan has always maintained a 10% allowance for doubtful accounts. Cash proceeds of Kaw Tan from factoring was P400,000. By the end of February 2020, half of the factored accounts were collected. In March 2020, customers returned goods costing P50,000 and it is the policy of Kaw Tan to maintain 20% gross profit on cost. Customers owing P60,000 paid within the discount period and relevant term was 2/30, n/45. By the end of March 2020, all factored receivables were collected. Prepare the journal entries in the books of Kaw Tanarrow_forwardExercise 5-16 (Algo) Deferred annuities [LO5-8] President Company purchased merchandise from Captain Corporation on September 30, 2024. Payment was made in the form of a noninterest-bearing note requiring President to make six annual payments of $5,200 on each September 30, beginning on September 30, 2027. Required: Calculate the amount at which President should record the note payable and corresponding purchase on September 30, 2024, assuming that an interest rate of 11% properly reflects the time value of money in this situation. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. Round your intermediate calculations to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Amount recorded:arrow_forward11.18 Outstanding deposits and unpresented cheques * LO3 The following information has been extracted from the cash records of Wheeler Ltd and shows four independent situations. Assume there were no direct bank debits or credits on the bank statement and that all outstanding deposits and unpresented cheques in one month appeared on the bank statement in the following month. 1. The total of outstanding deposits on the 30 April bank reconiliation statement was $1875. During May, the company made deposits of $40 200 to its bank account but the bank statement showed that only $39 840 was deposited during the month. 2. The total of unpresented cheques on the 30 April bank reconciliation statement was $1440. During May, the total of cheques issued was $29 175 but the bank statement showed that only $27 720 in cheques were presented during the month. 3. During July, deposits recorded on the bank statement totalled $46 200, but deposits according to the company's records were $43 950 and…arrow_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:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial 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