Accounting Principles Third Canadian Edition Chapter 8 Answers

25% x 6/12 = $1, 650 3. 2008 May 11 Allowance for Doubtful Accounts..... Accounts Receivable–Worthy....... 10, 000. The matching principle requires expenses to be recorded in the same period as the sales they helped generate. Accounting principles third canadian edition chapter 8 answers pdf. Soo Eng should realize that the decrease in net realizable value occurs when estimated uncollectibles are recognized in an adjusting entry (debit Bad debts expense; credit Allowance for Doubtful Accounts) in the period the sale occured.

1. Accounting principles third canadian edition chapter 8 answers.yahoo
2. Accounting principles third canadian edition chapter 8 answers key
3. Accounting principles third canadian edition chapter 8 answers pdf
4. Accounting principles third canadian edition chapter 8 answers.microsoft.com

Accounting Principles Third Canadian Edition Chapter 8 Answers.Yahoo

The payee still has a claim against the maker of the note for both the principal and the unpaid interest. Feb. 1 Notes Receivable—George................ 16, 000 Accounts Receivable—George..... Mar. Average collection period has increased from 17. Legal Notice Copyright. The Credit Card Expense and Debit Card Expense accounts are reported as operating expenses on the income statement.

Number of Days Outstanding 0-30 31-60 61-90 Over 90. Proust Company's growth rate should be a product of fair and accurate financial statements. Shaw's receivables turnover was almost 100% higher than Rogers, which means Shaw was more efficient than Rogers in collecting its receivables. Brooks Company $9, 000 x 6% x 1/12.. Mathias Co, $4, 000 x 5. When bank credit card sales are made the bank will electronically deposit cash into the retail company's bank account. 19, 080 4, 450 69, 580 44, 318. Both are valued at their net realizable value. All rights reserved. Accounts Receivable............................................. 16, 375 Net Realizable Value............................................... $184, 125. Accounting principles third canadian edition chapter 8 answers.microsoft.com. Balance before adjustment [see (b)]...................... Balance needed [$800, 000 x 6%]............................

Accounting Principles Third Canadian Edition Chapter 8 Answers Key

25% x 15/12 = 3, 019 $22, 000 x 5. 5% x 2/12] Interest Receivable........................ 4, 000 37 18. Accounting principles third canadian edition chapter 8 answers key. Q8-18 Q8-19 Q8-20 Q8-22 E8-12. 23 times Average Collection Period: 2004: 365 days ÷ 9. The write-off of an uncollectible account reduces both accounts receivable and the allowance for doubtful accounts by the same amount. BYP 8-3 COLLABORATIVE LEARNING ACTIVITY All of the material supplementing the collaborative learning activity, including a suggested solution, can be found in the Collaborative Learning section of the Instructor Resources site accompanying this textbook. Interest Receivable at September 30, 2008.

Debit Sales Return Sales Sales Sales Payment. EXERCISE 8-7 Nov. 1 Notes Receivable–Morgan................. 24, 000 Cash................................................ Dec. 1 Notes Receivable–Wright.................. Estimated uncollectibles are debited to Bad Debts Expense and credited to Allowance for Doubtful Accounts through an adjusting entry at the end of each period. Show balance sheet presentation. Notes Receivable............................... 100, 000 Cash................................................ Cash.................................................... Interest Revenue............................ ($100, 000 x 5% x 3/12). 75%]......................... 31 Cash [$4, 000 - $25].................... Debit Card Expense [50 x $0. Brief Exercises Exercises. SOLUTIONS TO PROBLEMS PROBLEM 8-1A (a). This makes it easier to manage receivables for example, follow up on payments and decide if additional credit should be granted. Overall, Satellite Mechanical's liquidity has deteriorated over the three year period. 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. Cash [$20, 000 - $3, 500 + $289].......... 16, 789 Accounts Receivable..................... 16, 789. A note usually bears interest for the entire period. Debit Sales Payment.

Accounting Principles Third Canadian Edition Chapter 8 Answers Pdf

BYP 8-4 (Continued) The selling staff has been placed in a conflict of interest position. Prepare assets section of balance sheet; calculate and interpret ratios. 2007 Accounts Receivable............................................. $260, 000 Less: Allowance for Doubtful Accounts................ 22, 155 Net Realizable Value............................................... $237, 845 2008 Accounts Receivable............................................. $275, 000 Less: Allowance for Doubtful Accounts................ 43, 020 Net Realizable Value............................................... $231, 980. Each of the major types of receivables should be identified in the balance sheet or in the notes to the financial statements. 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. Accounting for the disposition of a note receivable and an account receivable are the same. The inventory turnover and days sales in inventory will provide additional information – the days sales in inventory will tell you how long, on average it takes for inventory to be sold.

Current Ratio: 2004: $1, 710 ÷ $2, 259 = 0. After Write-Off $469, 150. Elaine Davidson Explanation Ref. 125 $ 41 33 51 $125.

Accounting Principles Third Canadian Edition Chapter 8 Answers.Microsoft.Com

31 Accounts Receivable—DRX..... Notes Receivable—DRX....... Interest Receivable [$6, 000 x 5% x 1/12].............. Interest Revenue [$6, 000 x 5% x 1/12].............. 6, 050. The company may have determined that the fees associated with selling the receivables are less than the cost of having to use short-term borrowings to finance operations. The percentage of sales approach is called the income statement approach because the calculation and the bad debts expense are based on a percentage of net credit sales; both are amounts that appear on the income statement. SOLUTIONS TO EXERCISES EXERCISE 8-1 Apr. 25% of $1, 950, 000 net credit sales). EXERCISE 8-12 CN securitizes a large portion of its receivables to accelerate its cash receipts to provide it with a source of current financing. When a customer makes a purchase using a credit card you will have to pay a percentage of the sale to the credit card company. June 25 Cash.................................................... [$6, 000 x 6% x 1/12]. Terms in this set (30). Interest should not be accrued on this note if it is unlikely to be collected. Sales Returns and Allowances......... Accounts Receivable..................... (c) Sep. 30 Accounts Receivable......................... Interest Revenue........................... [($20, 000 - $3, 500) x 21% x 1/12] (d) Oct. 4. Prepare aging schedule and record bad debts. Bad debt (d) 38, 400 End. ASSIGNMENT CHARACTERISTICS TABLE Problem Number 1A.

BRIEF EXERCISE 8-10 Note (a) Total Interest 1. While it is in their best interest to stimulate sales, this may deter them from performing adequate credit checks. PROBLEM 8-8A (a) Jan. 2 Accounts Receivable—George......... 16, 000 Sales............................................... 16, 000. Selling receivables provides a more current source of cash to help finance operations. 76 2005: $1, 149 ÷ $1, 958 = 0. A company, such as Canadian Pacific, may chose to securitize its receivables to accelerate cash receipts from their receivables. The number of days to sell inventory has decreased from 150. Bad Debts Expense........................... 12, 600 [($900, 000 - $50, 000 - $10, 000) x 1. Accounts and notes receivable are sometimes called trade receivables because they result from sales transactions and occur in the normal course of business operations.

From the income statement perspective, adjusting entries allow the correct expenses to be subtracted from revenue, which produces a correct net income. The bad debts expense reflects only the current year's estimates while the allowance is a result of estimates and write-offs over many years. 75% x 1/12 = 27 $9, 000 x 5% x 0/12 = 0 $424. 1 days 365 ÷ 6 = 60.

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