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AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

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Chapter 6, Problem 7C
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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 18GI
Problem 19GI
Problem 20GI
Problem 21GI
Problem 22GI
Problem 23GI
Problem 24GI
Problem 25GI
Problem 26GI
Problem 27GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 8MC
Problem 9MC
Problem 10MC
Problem 11MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 10RE
Problem 11RE
Problem 12RE
Problem 13RE
Problem 14RE
Problem 15RE
Problem 16RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 17E
Problem 18E
Problem 19E
Problem 20E
Problem 21E
Problem 22E
Problem 23E
Problem 24E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 12P
Problem 13P
Problem 14P
Problem 15P
Problem 16P
Problem 17P
Problem 18P
Problem 19P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
Problem 7C
Problem 8C
Problem 9C
Problem 10C
Problem 12C
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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
49 views

Receivables Issues

Hogan Company uses the net method of accounting for sales discounts. Hogan also offers trade discounts to various groups of buyers. On August 1, 2019, Hogan factored some accounts receivable on a without-recourse basis. Hogan incurred a finance charge.

Hogan also has some notes receivable bearing an appropriate rate of interest. The principal and total interest are due at maturity. The notes were received on October 2, 2019, and mature on October 1, 2020. Hogan’s operating cycle is less than one year.

Required:

  1. 1. Using the net method, how should Hogan account for the sales discounts at the date of sale? What is the rationale for the amount recorded as sales under the net method?
  2. 2.
    1. a. Using the net method, what is the effect on Hogan’s sales revenues and net income when customers do not take the sales discounts?
    2. b. What is the effect of trade discounts on sales revenues and accounts receivable? Why?
    3. c. How should Hogan account for the accounts receivable factored on August 1, 2019? Why?
    4. d. How should Hogan report the effects of the interest-bearing notes receivable on its December 31, 2019, balance sheet and on its income statement for the year ended December 31,2019? Why?

1.

To determine

State  the  manner  by which Company  H  will account sales discount at the date of sale under the net method also specify the rationale for the amount recorded as sales under net  method.

Explanation

 Company H will make an account for sale of discounts under the net method for the date of sale by recording the accounts receivables and sales rev...

2. a

To determine

State the effect of Company H‘s sales revenues and net income when the customers does not take the sales discount under the net method.

2. b

To determine

State the effect of trade discounts on sales revenue and accounts receivable.

2. c

To determine

Provide the manner by which the Company H will account for accounts receivable factored on August 1, 2019.

2. d

To determine

State the effect of interest –bearing notes receivable on its balance sheet and on its income statement for the year ended December 31, 2019.

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Chapter 6,
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Ch-6 P-1GICh-6 P-2GICh-6 P-3GICh-6 P-4GICh-6 P-5GICh-6 P-6GICh-6 P-7GICh-6 P-8GICh-6 P-9GICh-6 P-10GI
Ch-6 P-11GICh-6 P-12GICh-6 P-13GICh-6 P-14GICh-6 P-15GICh-6 P-16GICh-6 P-17GICh-6 P-18GICh-6 P-19GICh-6 P-20GICh-6 P-21GICh-6 P-22GICh-6 P-23GICh-6 P-24GICh-6 P-25GICh-6 P-26GICh-6 P-27GICh-6 P-1MCCh-6 P-2MCCh-6 P-3MCCh-6 P-4MCCh-6 P-5MCCh-6 P-6MCCh-6 P-7MCCh-6 P-8MCCh-6 P-9MCCh-6 P-10MCCh-6 P-11MCCh-6 P-1RECh-6 P-2RECh-6 P-3RECh-6 P-4RECh-6 P-5RECh-6 P-6RECh-6 P-7RECh-6 P-8RECh-6 P-9RECh-6 P-10RECh-6 P-11RECh-6 P-12RECh-6 P-13RECh-6 P-14RECh-6 P-15RECh-6 P-16RECh-6 P-1ECh-6 P-2ECh-6 P-3ECh-6 P-4ECh-6 P-5ECh-6 P-6ECh-6 P-7ECh-6 P-8ECh-6 P-9ECh-6 P-10ECh-6 P-11ECh-6 P-12ECh-6 P-13ECh-6 P-14ECh-6 P-15ECh-6 P-16ECh-6 P-17ECh-6 P-18ECh-6 P-19ECh-6 P-20ECh-6 P-21ECh-6 P-22ECh-6 P-23ECh-6 P-24ECh-6 P-1PCh-6 P-2PCh-6 P-3PCh-6 P-4PCh-6 P-5PCh-6 P-6PCh-6 P-7PCh-6 P-8PCh-6 P-9PCh-6 P-10PCh-6 P-11PCh-6 P-12PCh-6 P-13PCh-6 P-14PCh-6 P-15PCh-6 P-16PCh-6 P-17PCh-6 P-18PCh-6 P-19PCh-6 P-1CCh-6 P-2CCh-6 P-3CCh-6 P-4CCh-6 P-5CCh-6 P-6CCh-6 P-7CCh-6 P-8CCh-6 P-9CCh-6 P-10CCh-6 P-12C

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