(a) Explanation Accounts receivable: 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. Note receivable: Note receivable refers to a written promise for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to lender or creditor. Notes receivable is an asset of a business. Credit card sales: Credit card is an electronic card, which allows the credit card holders to buy something on credit at convenience and without paying immediate cash. Businesses allow customers to buy its products through bank credit cards, such sales are termed as credit card sales. For such convenience, bank charges some percentage as service charge expense on the total value of goods, or services purchased on credit. Procedure for debiting and crediting an account in journal entry: Increase in assets account, increase in expenses account, and decrease in liabilities account should be debited. Decrease in assets account, increase in revenue account, and increase in liabilities account should be credited. July 5: Company M had made sales on account. This transaction increases accounts receivable and sales revenue, as sales has been made on credit. Accounts receivable is an asset account. Hence, it is debited to increase its balance by $4,500. Sales revenue is a revenue account. Increase in sales revenue, increases the stockholders’ equity . Hence, it is credited to increase its balance by $4,500. July 14: Company M has made sales for $600 and accepted a credit card payment. For accepting the credit card payment Company M has incurred 3% bank charge on its $600 sales. This transaction increases cash, service charge expense, and sales revenue... (b) To determine Post the above entries in all of the receivables account. (c) To determine Show the balance sheet presentation of receivables account at July 31.

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

6th Edition

ISBN: 9781119191674

Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

Publisher: WILEY

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Question

Chapter 8, Problem 8AP

(a)

To determine

Prepare the journal entry in the books of Company M for the transactions made in the month of July.

(b)

To determine

Post the above entries in all of the receivables account.

(c)

To determine

Show the balance sheet presentation of receivables account at July 31.

Expert Solution & Answer

Chapter 8 Solutions

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

Ch. 8 - Prob. 1Q Ch. 8 - Prob. 2Q Ch. 8 - Prob. 3Q Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - Prob. 6Q Ch. 8 - Prob. 7Q Ch. 8 - Prob. 8Q Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

Ch. 8 - Prob. 11Q Ch. 8 - Prob. 12Q Ch. 8 - Prob. 13Q Ch. 8 - Prob. 14Q Ch. 8 - Prob. 15Q Ch. 8 - Prob. 16Q Ch. 8 - Prob. 17Q Ch. 8 - Prob. 18Q Ch. 8 - Prob. 19Q Ch. 8 - Prob. 20Q Ch. 8 - Prob. 21Q Ch. 8 - Prob. 22Q Ch. 8 - Prob. 23Q Ch. 8 - Prob. 24Q Ch. 8 - Prob. 1BE Ch. 8 - Prob. 2BE Ch. 8 - Prob. 3BE Ch. 8 - Prob. 4BE Ch. 8 - Prob. 5BE Ch. 8 - Prob. 6BE Ch. 8 - Prob. 7BE Ch. 8 - Prob. 8BE Ch. 8 - Prob. 9BE Ch. 8 - Prob. 10BE Ch. 8 - Prob. 11BE Ch. 8 - Prob. 12BE Ch. 8 - Prob. 1DIE Ch. 8 - Prob. 2ADIE Ch. 8 - Prob. 2BDIE Ch. 8 - Prob. 3DIE Ch. 8 - Prob. 4DIE Ch. 8 - Prob. 1E Ch. 8 - Prob. 2E Ch. 8 - Prob. 3E Ch. 8 - Prob. 4E Ch. 8 - Prob. 5E Ch. 8 - Prob. 6E Ch. 8 - Prob. 7E Ch. 8 - Prob. 8E Ch. 8 - Prob. 9E Ch. 8 - Prob. 10E Ch. 8 - Prob. 11E Ch. 8 - Prob. 12E Ch. 8 - Prob. 13E Ch. 8 - Prob. 14E Ch. 8 - Prob. 15E Ch. 8 - Prob. 16E Ch. 8 - Prob. 17E Ch. 8 - Prob. 1AP Ch. 8 - Prob. 2AP Ch. 8 - Prob. 3AP Ch. 8 - Prob. 4AP Ch. 8 - Prob. 5AP Ch. 8 - Prob. 6AP Ch. 8 - Prob. 7AP Ch. 8 - Prob. 8AP Ch. 8 - Prob. 9AP Ch. 8 - Prob. 1CACR Ch. 8 - Prob. 1EYCT Ch. 8 - Prob. 2EYCT Ch. 8 - Prob. 3EYCT Ch. 8 - Prob. 4EYCT Ch. 8 - Prob. 7EYCT Ch. 8 - Prob. 8EYCT Ch. 8 - Prob. 9EYCT Ch. 8 - Prob. 1IFRS

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