Elaine Davidson Explanation Ref. The debtor will normally have to pay interest and the term of the note will extend for periods of 30 days or more. Accounting principles third canadian edition chapter 8 answers key. It is deducted from receivables to provide proper valuation for accounts receivable. PROBLEM 8-8B (Continued) May. This makes it easier to manage receivables for example, follow up on payments and decide if additional credit should be granted. Accounts Receivable $315, 000 90, 000 60, 000 35, 000 $500, 000% Estimated Uncollectible 1% 4% 10% 20%. The rate varies but 3% would not be unusual.
29 Cash........................................... Credit Cards Receivable...... 31 Credit Cards Receivable........... Interest Revenue................... 325. Accounts Receivable 845, 000 Write-offs (b) 38, 400 (a) 4, 550, 000 Collections (c) 4, 429, 100 927, 500 Allowance for Doubtful Accounts Beg. 59, 700 15, 300 Dr. 30, 000 14, 700. 280 843 299 $1, 422 $1, 422.
Rod cannot completely eliminate bad debts for the company even though he performs a credit check on each customer. 75% x 12/12 = $2, 633. 651, 158 [($278, 631 + $258, 816) ÷ 2] = 2. 25% x 1/12]............... 1, 057 1, 050 7. 25 Cash................................................ Credit Card Receivables........... 5, 400. 1 Notes Receivable............................... Accounts Receivable..................... 9, 000 9, 000. 5% x 3/12] 25 Notes Receivable—Avery.................. Accounting principles third canadian edition chapter 8 answers.microsoft. Accounts Receivable—Avery........ 6, 000.
11, 500 19, 300 13, 900 14, 115. 2 Property, plant and equipment Equipment................................................... $2, 310. Sales...................................... Feb. 28 Accounts Receivable [$7, 000 x 24% x 1/12]................. Interest Revenue................... (b). Brooks Company $9, 000 x 6% x 1/12.. Mathias Co, $4, 000 x 5.
The bad debts expense is affected when the allowance is estimated. Debit Opening Balance Sales Returns Collections Interest Sales Recovery Collection (recovery) Collections Write-offs Interest. 0 (3) When an account previously written off is later collected, the original write-off is reversed and then the collection is recorded. A separate account for interest receivable is used. The two approaches of estimating uncollectibles under the allowance method are (1) percentage of sales (income statement approach) and (2) percentage of receivables (balance sheet approach). Accounting principles third canadian edition chapter 8 answers.com. Average collection period has increased from 17. The payee still has a claim against the maker of the note for both the principal and the unpaid interest. The bad debts expense on the income statement would be $18, 000 (2. ALD Inc. KAB Ltd. DNR Co. MJH Corp. Total.
Neither could the performance of one business be compared to the performance of another. Interest Receivable............................ ($100, 000 x 5% x 3/12). Subsidiary ledger account balances: Elaine Davidson...................................................... Andrew Noren.......................................................... Erik Smistad............................................................ Total......................................................................... Balance per general ledger control account......... 570 495 875 1, 223 1, 522 1, 422. 6 days to purchase its inventory, sell it and collect the cash on sale. The note receivable due in two years would be included in Other Assets on the Company's balance sheet. Total interest revenue for the year ended December 31, 2008 - $4, 004 calculated as follows: Note 1. 1 days 365 ÷ 6 = 60. The data contained in these files are protected by copyright. The material provided herein may not be downloaded, reproduced, stored in a retrieval system, modified, made available on a network, used to create derivative works, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without the prior written permission of John Wiley & Sons Canada, Ltd.
23 days The company's receivables turnover and collection period have improved marginally since the previous year. ANSWERS TO QUESTIONS 01. 75% x 1/12 = 27 $9, 000 x 5% x 0/12 = 0 $424. 75% x 1/12].............. Interest Revenue [$4, 800 x 6. 7 = 42 days 365 ÷ 8.
25%)................................... 24, 375 Allowance for Doubtful Accounts......... 24, 375. However, the company may have identified specific accounts that are doubtful, which may be the reason why the balance has not changed from year to year. 995, 000 3, 615, 000 3, 575, 000 875, 000 800, 000 830, 000 800, 000. CONTINUING COOKIE CHRONICLE (a).