Preblem 4-2 (IAA)Credible Company provided the following T-accountsummarizing the transactions affecting the accounts receivablefor the current year:Accounts Receivable600,000 Collections from customers 5,300,0006,000,000 WriteoffJan. 1 balanceCharge salesShareholders'- subscriptionsDeposit on contractClaims against commoncarrier for damagesIOUS from employeesCash advance to affiliates 100,000Advances to a supplier35,000Merchandise returns40,000200,000| Allowances to customerfor shipping damages120,00025,000Collections on carrier claims40,000100,000 Collection on subscriptions50,00010,00050,000Required:a. Compute the correct amount of accounts receivable.b. Prepare one compound entry to adjust the accounts receivable.c. Compute the amount to be presented as "trade and otherreceivables" under current assets.d. Indicate the classification and presentation of the other items.

Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Credible Company provided the following T-account summarizing the transactions affecting the accounts receivable for the current year: Accounts Receivable 600,000 Collections from customers 5,300,000 6,000,000 Writeoff Jan. 1 balance Charge sales Shareholders' subscriptions Deposit on contract Claims agàinst common carrier for damages IOUS from employees 35,000 Merchandise returns 200,000 Allowances to customer for shipping damages 40,000 120,000 25,000 40,000 Collections on carrier claims 100,000 Collection on subscriptions 50,000 10,000 Cash advance to affiliates 100,000 Advances to a supplier 50,000 Required: a. Compute the correct amount of accounts receivable. b. Prepare one compound entry to adjust the accounts receivable. c. Compute the amount to be presented as "trade and other receivables" under current assets. d. Indicate the classification and presentation of the other items.

Credible Company provided the following T-account summarizing the transactions affecting the accounts receivable for the current year: Accounts Receivable 600,000 Collections from customers 5,300,000 6,000,000 Writeoff Jan. 1 balance Charge sales Shareholders' subscriptions Deposit on contract Claims agàinst common carrier for damages IOUS from employees 35,000 Merchandise returns 200,000 Allowances to customer for shipping damages 40,000 120,000 25,000 40,000 Collections on carrier claims 100,000 Collection on subscriptions 50,000 10,000 Cash advance to affiliates 100,000 Advances to a supplier 50,000 Required: a. Compute the correct amount of accounts receivable. b. Prepare one compound entry to adjust the accounts receivable. c. Compute the amount to be presented as "trade and other receivables" under current assets. d. Indicate the classification and presentation of the other items.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

See similar textbooks

Similar questions

Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 2. Issued Check No. 410 for 3,400 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for 27,046, in payment of 9,273 of social security tax, 2,318 of Medicare tax, and 15,455 of employees federal income tax due. 13. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees earnings of December13: social security tax, 4,632; Medicare tax, 1,158; state unemployment tax, 350; federal unemployment tax, 125. 16. Issued Check No. 424 to Jay Bank for 27,020, in payment of 9,264 of social security tax, 2,316 of Medicare tax, and 15,440 of employees federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for 31,500, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees earnings of December27: social security tax, 4,668; Medicare tax, 1,167; state unemployment tax, 225; federal unemployment tax, 75. 27. Issued Check No. 543 for 20,884 to State Department of Revenue in payment of employees state income tax due on December 31. 31. Issued Check No. 545 to Jay Bank for 3,400 to invest in a retirement savings account for employees. 31. Paid 45,000 to the employee pension plan. The annual pension cost is 60,000. (Record both the payment and unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: operations salaries, 8,560; officers salaries, 5,600; office salaries,1,400. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 15,000.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
Refer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.
Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Codigo Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 1. Issued Check No. 815 to Aberderas Insurance Company for 2,520, in payment of the semiannual premium on the group medical insurance policy. 1. Issued Check No. 816 to Alvarez Bank for 8,131, in payment for 2,913 of social security tax, 728 of Medicare tax, and 4,490 of employees federal income tax due. 2. Issued Check No. 817 for 2,300 to Alvarez Bank to invest in a retirement savings account for employees. 12. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 1. Issued Check No. 815 to Aberderas Insurance Company for 2,520, in payment of the semiannual premium on the group medical insurance policy. 1. Issued Check No. 816 to Alvarez Bank for 8,131, in payment for 2,913 of social security tax, 728 of Medicare tax, and 4,490 of employees federal income tax due. 2. Issued Check No. 817 for 2,300 to Alvarez Bank to invest in a retirement savings account for employees. 12. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 12. Issued Check No. 822 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 12. Journalized the entry to record payroll taxes on employees earnings of December12: social security tax, 1,452; Medicare tax, 363; state unemployment tax, 315; federal unemployment tax, 90. 15. Issued Check No. 830 to Alvarez Bank for 7,938, in payment of 2,904 of social security tax, 726 of Medicare tax, and 4,308 of employees federal income tax due. 26. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 26. Issued Check No. 840 for the net amount of the biweekly payroll to fund the payroll bank account. Dec. 26. Journalized the entry to record payroll taxes on employees earnings of December 26: social security tax, 1,455; Medicare tax, 364; state unemployment tax, 150; federal unemployment tax, 40. 30. Issued Check No. 851 for 6,258 to State Department of Revenue, in payment of employees state income tax due on December 31. 30. Issued Check No. 852 to Alvarez Bank for 2,300 to invest in a retirement savings account for employees. 31. Paid 55,400 to the employee pension plan. The annual pension cost is 65,500. (Record both the payment and the unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: sales salaries, 4,275; officers salaries, 2,175; office salaries, 825. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 13,350.
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
On March 24, MS Companys Accounts Receivable consisted of the following customer balances: S. Burton 310 A. Tangier 240 J. Holmes 504 F. Fullman 110 P. Molty 90 During the following week, MS made a sale of 104 to Molty and collected cash on account of 207 from Burton and 360 from Holmes. Prepare a schedule of accounts receivable for MS at March 31, 20--.
Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.