INTERMEDIATE ACCT VOL.2>CUSTOM<
9th Edition
ISBN: 9781307165067
Author: SPICELAND
Publisher: MCG/CREATE
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Chapter 7, Problem 7.22BE
Impairments of
• Appendix 7B
Einhorn Industries believes it is not probable that Thaler Inc. will default on an account receivable, but given the possibility of default, Einhorn believes it will collect $30,000 less than the receivable’s current carrying value on Einhorn’s balance sheet. Under current GAAP, how much impairment charge should Einhorn recognize?
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Excercises
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…
Question 9
Concord Company provides for bad debt expense at the rate of 3% of accounts receivable. The following data are available for 2018:
Allowance for doubtful accounts, 1/1/18 (Cr.)
$ 11300
Accounts written off as uncollectible during 2018
10400
Ending accounts receivable
1204000
The Allowance for Doubtful Accounts balance at December 31, 2018, should be
$37020.
$900.
$36120.
$35220.
Problem 22
In its December 31, 2022 statement of financial position, Reederei Company reported receivables of P250,000 and related allowance for uncollectibility of P20,000. Such receivables are in litigation and the cost of litigation is 20% of the receivables. At December 31, 2022, it is reasonably possible that Beirut Company will not be able to collect on the receivables after litigation.
What is the total amount of risk of accounting loss related to Reederei’s receivables?
What is the total amount of off balance sheet risk related to Reederei’s receivables?
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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- E7.8 (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_forwardProblem 23 From inception of operation in 2017, Danica Company carried no allowance for doubtful accounts. Uncollectible receivables were expensed as written off and recoveries were credited to income as collected. On March 1, 2021, after the 2020 financial statements were issued, management recognized that Danica’s accounting policy with respect to doubtful accounts was not correct and determined that an allowance for doubtful accounts was necessary. A policy was established to maintain an allowance for doubtful accounts based on Danica’s historical bad debt loss percentage applied to year end accounts receivable. The historical bad debt loss percentage is to be recomputed each year based on the relationship of net write offs to credit sales for all available past years up to a maximum of five years. Information from Danica’s records for five years is as follows: Year Credit sales Accounts written off Recoveries 2017 P 750,000 P 7,500 Nil 2018 1,100,000 20,000 P 1,000…arrow_forwardQ 26 Question 26 Assuming that the Rector Company uses the Balance Sheet Approach to estimate bad debt expense. Based on aging of accounts receivable management estimates that the desired balance in the allowance for uncollectible accounts should be $18,000. The balance in the allowance for uncollectible accounts before the adjusting entry is made is $1,000 CREDIT balance. The entry to record bad debt expense would be: Select one: a. Dr. Allowance for Uncollectible Accounts 17,000 and Cr. Accounts Receivable 17,000 b. Bad Debt Expense 17,000 and Cr. Allowance for Uncollectible Accounts 17,000 c. Dr. Allowance for Uncollectible Accounts 18,000 and Cr. Accounts Receivable 18,000 d. Dr. Bad Debt Expense 18,000 and Cr. Allowance for Uncollectible Accounts 18,000arrow_forward
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