INTERMEDIATE ACCT VOL.2>CUSTOM<
9th Edition
ISBN: 9781307165067
Author: SPICELAND
Publisher: MCG/CREATE
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Chapter 7, Problem 7.19BE
Receivables turnover
• LO7–8
Camden Hardware’s credit sales for the year were $320,000.
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Days’ Sales in Receivables [LO2] A company has net income of $218,000, a profi tmargin of 8.70 percent, and an accounts receivable balance of $132,850. Assuming70 percent of sales are on credit, what is the company’s days’ sales in receivables?
17-5 RECEIVABLES INVESTMENT McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases.
What is the days sales outstanding?
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What is the percentage cost of trade credit to customers who take the discount?
What is the percentage cost of trade credit to customers who do not take the discount and pay in 40 days?
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At the beginning of the current period, Bramble Corp. had balances in Accounts Receivable of $196,800 and in Allowance for Doubtful Accounts of $9,510 (credit). During the period, it had credit sales of $864,300 and collections of $687,610. It wrote off as uncollectible accounts receivable of $6,804. However, a $3,219 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $24,000 at the end of the period. (Omit cost of goods sold entries.)
(a) - (d)
New attempt is in progress. Some of the new entries may impact the last attempt grading.
Your answer is partially correct.
(a)
Prepare the entries to record sales and collections during the period.
(b)
Prepare the entry to record the write-off of uncollectible accounts during the period.
(c)
Prepare the entries…
Chapter 7 Solutions
INTERMEDIATE ACCT VOL.2>CUSTOM<
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...Ch. 7 - Briefly explain the difference between the income...
Ch. 7 - Prob. 7.11QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.14QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Explain how the CECL model (introduced in ASU No....Ch. 7 - Prob. 7.18QCh. 7 - Prob. 7.19QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.21QCh. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Cash discounts; gross method LO73 On December 28,...Ch. 7 - Prob. 7.5BECh. 7 - Sales re turns LO74 During 2018, its first year...Ch. 7 - Sales re turns LO74 Refer to the situation...Ch. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.12BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.15BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.17BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.20BECh. 7 - Prob. 7.21BECh. 7 - Impairments of Accounts Receivable Appendix 7B...Ch. 7 - Credit Losses on Accounts Receivable (CECL Model) ...Ch. 7 - Prob. 7.1ECh. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Trade and cash discounts; the gross method and the...Ch. 7 - Prob. 7.6ECh. 7 - Cash discounts; the net method LO73 [This is a...Ch. 7 - Sales returns LO74 Halifax Manufacturing allows...Ch. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Uncollectible accounts; allowance method; balance...Ch. 7 - Uncollectible accounts; allowance method and...Ch. 7 - Uncollectible accounts; allowance method; solving...Ch. 7 - Note receivable LO77 On June 30, 2018, the...Ch. 7 - Noninterest-bearing note receivable LO77 [This is...Ch. 7 - Long-term notes receivable LO77 On January 1,...Ch. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Discounting a note receivable LO78 Selkirk...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Receivables; transaction analysis LO73, LO75...Ch. 7 - Prob. 7.25ECh. 7 - Prob. 7.26ECh. 7 - Prob. 7.27ECh. 7 - Prob. 7.28ECh. 7 - Prob. 7.29ECh. 7 - Prob. 7.30ECh. 7 - Impairments of Notes Receivable Appendix 7B At...Ch. 7 - Prob. 7.32ECh. 7 - Prob. 7.33ECh. 7 - Prob. 7.34ECh. 7 - Uncollectible accounts; allowance method; income...Ch. 7 - Uncollectible accounts; Amdahl LO75 Real World...Ch. 7 - Bad debts; Nike, Inc. LO75 Real World Financials...Ch. 7 - Uncollectible accounts LO75, LO76 Raintree...Ch. 7 - Prob. 7.5PCh. 7 - Notes receivable; solving for unknowns LO77...Ch. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10PCh. 7 - Prob. 7.11PCh. 7 - Accounts and notes receivable; discounting a note...Ch. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15PCh. 7 - Prob. 7.16PCh. 7 - Prob. 7.17PCh. 7 - Prob. 7.1BYPCh. 7 - Prob. 7.2BYPCh. 7 - Prob. 7.3BYPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.6BYPCh. 7 - Prob. 7.7BYPCh. 7 - Prob. 7.8BYPCh. 7 - Prob. 7.9BYPCh. 7 - Prob. 7.10BYPCh. 7 - Prob. 7.11BYPCh. 7 - Prob. 1CCTC
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- Percent of sales method At the end of the current year, Accounts Receivable has a balance of 2,150,000; Allowance for Doubtful Accounts has a debit balance of 10,500; and sales for the year total 51,850,000. Bad debt expense is estimated at 1/4 of 1% of sales. Determine (A) the amount of the adjusting entry for uncollectible accounts; (B) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (C) the net realizable value of accounts receivable.arrow_forwardProviding for doubtful accounts At the end of the current year, the accounts receivable account has a debit balance of 2,950,000 and sales for the year total 27,400,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions: A. The allowance account before adjustment has a debit balance of 9,500. Bad debt expense is estimated at of 1% of sales. B. The allowance account before adjustment has a debit balance of 9,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of 188,000. C. The allowance account before adjustment has a credit balance of 31,400. Bad debt expense is estimated at 1/2 of 1% of sales. D. The allowance account before adjustment has a credit balance of 31,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of 175,000.arrow_forwardCalculating the Average Collection Period [LO2] Ortiz Lumber Yard has acurrent accounts receivable balance of $431,287. Credit sales for the year justended were $3,943,709. What is the receivables turnover? The days’ sales inreceivables? How long did it take on average for credit customers to pay off theiraccounts during the past year?arrow_forward
- 45.Ping Company finances some of its current operations by factoring its accounts receivable to a finance company. On July 1, 2021, the company factored P2,000,000 of its accounts receivable to Atlas Finance Company. Purchase price was 85% of the receivables factored. Atlas withheld 5% of the purchase price as protection against sales returns and allowances.Sales returns recorded by Ping on the factored accounts receivable totaled P30,000; the balance of the factor’s holdback was settled by the finance company on August 31, 2021.What was the total cash received by Ping Company from this factored accounts after full settlement by the factor?arrow_forwardE7.8 (LO 3) (Recording Bad Debts) At the end of 2020, Aramis Company has accounts receivable of $800,000 and an allowance for doubtful accounts of $40,000. On January 16, 2021, Aramis Company determined that its receivable from Ramirez Company of $6,000 will not be collected, and management authorized its write-off. Instructions: a. Prepare the journal entry for Aramis Company to write off the Ramirez receivable. b. Prepare the entries if Ramirez later pays back half of what he owed.arrow_forwardExcercises E7.8 (LO3) (Recording Bad Debts) At the end of 2019, Sorter plc has accountsreceivable of £900,000 and an allowance for doubtful accounts of £40,000. On January 16, 2020, Sorter determined that its receivable from Ordonez Orchards£8,000 will not be collected, and management authorized its write-off. Instructions Prepare the journal entry for Sorter plc to write off the Ordonez receivable. What is the cash realizable value of Sorter plc's accounts receivable beforethe write-off of the Ordonez receivable? What is the cash realizable value of Sorter plc's accounts receivable afterthe write-off of the Ordonez receivable? E7.9 (LO3) (Computing Bad Debts and Preparing Journal Entries) The trialbalance before adjustment of Estefan Inc. shows the following balances. Accounts Receivable $80.000 (D) Allowance for Doubtful Accounts $1.750 (D) Sales Revenue (net, all on credit) $580.000 (K) Instructions Give the entry for estimated bad debts assuming that the allowance is to…arrow_forward
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