Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.
Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To Journalize: The given transaction of Company AWP, to determine the net effect of selling and collection activities.
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LooseLeaf Intermediate Accounting w/ Annual Report; Connect Access Card
- Page 328 EXERCISE 7.9 Industry Characteristics and Collection Performance e LO7-8 The following information was taken from annual reports of Goodyear Tire & Rubber and PPL Corp.., a public utility: Goodyear PPL Net sales $18.1 billion $ 11.5 billion Average accounts receivable 2.3 billion 923 million a. Compute for each company the accounts receivable turnover rate for the year. b. Compute for each company the average number of days required to collect outstanding receivables (round answers to nearest whole day). c. Explain why the figures computed for Goodyear in parts a and b are so different from those computed for PPL.arrow_forwardView Policies Current Attempt in Progress The following information relates to Sunland Limited's Cash account. The reconciled cash balance from June's bank reconciliation is $25,100. During the month of July, Sunland recorded cash receipts of $28,260 and cash payments of $15,670 in the general ledger Cash account. At July 31, Sunland Limited had an reconciled cash balance of $37,690. An examination of the company's July bank statement shows a balance of $19,547 on July 31; outstanding cheques $3,917; deposits in transit $1,737; EFT collections on account that were not yet recorded on the books $2,189; NSF cheque $1,251; NSF fee $69; and bank service charges $109. Prepare the necessary journal entries required on July 31 for Sunland. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account…arrow_forwardExercise 21-4 (Algo) Summary entries for cash received from customers [LO21-3] For each of the three independent situations determine the amount of cash received from the customers and prepare journal entries that summarize the selling and collection activities for the reporting period. All dollars are in millions. Complete this question by entering your answers in the tabs below. Cash Recd from Cust General Journal Determine the amount of cash received from the customers. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Sales Revenue Situation 1 155 2 155 3 155 Accounts Receivable Cash Received from Increase (Decrease) Customers 0 19 (19)arrow_forward
- Problem 1.5: Anne Corporation accounts for its sales under the cash basis. Anne Corporation cash receipts books amounted to P 1,400,000. Total collections from customers, including cash sales made and recoveries of previously written-off accounts. Based on Audit investigation, they revealed that the additional information are the following: Accounts receivable, January 1, 2021 Accounts receivable, December 31, 2021 Notes receivable, trade outstanding, January 1, 2021 Notes receivable, trade outstanding, December 31, 2021 Sales discount taken by customers Sales returns before collections were made (Evidenced by issued credit memos) Sales returns after collections were made, thus refunds were given Write-off worthless accounts receivable Cash recoveries from accounts previously write-off 100,000 140,000 80,000 90,000 40,000 25,000 5,000 30,000 10,000 Requirements: Compute for the following under the accrual basis of accounting: a. Gross sales for the year b. Net sales for the year c.…arrow_forwardWhat is the amount of cash disbursements per book in July? a. 6,550,000 b. 6,700,000 c. 7,300,000 d. 6,850,000arrow_forwardQUESTION 16 Con-yay & JZ Incorporated has an average collection period (accounts receivable/daily credit sales) of 74 days. What is the accounts receivable turnover ratio (credit sales/accounts receivable) for Smart and Smiley? You may use a 360-day year. a. 4.86 b. 2.47 c. 2.66 d. 1.68arrow_forward
- Question 12 of 20 View Policies Current Attempt in Progress During its first year of operations, Pharoah Company had credit sales of $3,124,900; $652,500 remained uncollected at year-end. The credit manager estimates that $36,100 of these receivables will become uncollectible. (a) Prepare the journal entry to record the estimated uncollectibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation eTextbook and Media List of Accounts Save for Later Debit Credit Attempts: 0 of 2 used (b) The parts of this question must be completed in order. This part will be available when you complete the part above. *** Submit Answerarrow_forwardQuestion 13 Calculate the average collection period for Roman Inc. if its accounts receivables were $550 at the beginning of a year in which the firm generated $3,000 of sales? OA 61 days OB. 73 days OC. 60 days OD.67 daysarrow_forwardQuestion 19 of 31 F Dickens Co. reported net income of $58,000 for the year ended December 31, 2022. January 1 balances in accounts receivable and accounts payable were $26,000 and $26,500 respectively. Year-end balances in these accounts were $21,000 and $30,000, respectively. January 1 balances in long-term notes receivable and long-term notes payable were $131,000 and $96,500 respectively. Year-end balances in these accounts were $113,000 and $84,000, respectively. Assuming that all relevant information has been presented, Dickens Co's cash flows from operating activities would be: A $66,500 B $59,500 C $58,000 D $67,000 E $56,500 No polarrow_forward
- Exercise 10-05 In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Ivanhoe Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $29,500 and sales taxes $1,475. 2. Pharoah Company does not segregate sales and sales taxes. Its register total for April 15 is $21,730, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for Ivanhoe Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Ivanhoe Company on April 10 enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes…arrow_forwardQUESTION 17 Claculate Delta Airlines' Cash COnversion Cycle based on the following information: Sales 279,852 COGS 164,821 Accounts Receivable 36,266 Inventory 5,171 Accounts Payable 56,060arrow_forwardExercise 6-15 (Algo) Liquid assets and accounts receivable LO A1 Barga Company's net sales for Year 1 and Year 2 are $665,000 and $749,000, respectively. Its year-end balances of accounts receivable follow: Year 1, $64,000; and Year 2, $91,000. a. Complete the below table to calculate the days' sales uncollected at the end of each year. Note: Do not round intermediate calculations. Round your "Days' Sales Uncollected" answers to 1 decimal place. Year 1: Year 2: Choose Numerator: Accounts receivable $ $ Days' Sales Uncollected 1 Choose Denominator: X 1 60,000 1 94,000 / 1 X X X Days 365 365 365 = = = Days' Sales Uncollected Days' sales uncollected 31.3 days daysarrow_forward
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