(1)
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.
To compute: The amount of accounts receivable due from customers at the end of 2015 and 2014.
(2)
To compute: The amount of Accounts Receivable Written-off during 2015.
(3)
To compute: The amount of Gross Sales.
(4)
The amount of cash collected from customers during the year, assuming that all sales are made on a credit basis.
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Chapter 7 Solutions
INTERMEDIATE ACCT VOL.2>CUSTOM<
- Prepare all necessary entries in general journal form for Garfield Corp. E7.13 (LO 4) (Note Transactions at Unrealistic Interest Rates) On July 1, 2020, Agincourt Inc. made two sales. 1. It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt’s books at a cost of $590,000. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest payable annually). Agincourt Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest. Instructions Record the two journal entries that should be recorded by Agincourt Inc. for the sales transactions above that took place on July 1, 2020.arrow_forwardONLY ANS PART C PLZ THX Old Bank started its first day of operations (11 March, 2021) with $6 million in capital. $100 million in checkable deposits is received. The bank issues a $30 million commercial loan and another $30 million in mortgages. (a) If required reserves are 8%, what does the bank balance sheets look like? (b) On the first day of operation (11 March, 2021), Clive withdraw his checkable deposits $40 million with the Old Bank. What does the balance sheet look like? Are there any problems? (c) Suggest one way that the Old Bank can solve the problem and show how does the bank balance sheet changed afterwardsarrow_forward25 What lesson did we derive from Suratul Baqara Q2:280 in relation to Islamic banks’ debtor-customer relations?* A. If the debtor is in difficulty, grant him time till it is easy for him to repay B. Be lenient to customers at the time of financing the project C. Default charges apply to any delay of payment D. Cancel the transactionsarrow_forward
- A6 Bank failure in Ghana. Can Financial Ratios predict? (Unibank and Capital bank) You are to write a research proposal. 4,000 words.arrow_forwardQuestion 15 Consider a policy with a R5000 straight deductible. Determine the amount that the insurer would pay for a loss of R12 000. 1 R7 000 2 R5 000 3 R12 000 4 The insurer will not be liable for any payment.arrow_forward5.13 Bank A pays 10% interest compounded annually on deposits, while Bank B pays 9% compounded daily. a. Based on the EAR (or EFF%), which bank should you use? You would choose Bank A because its EAR is higher. You would choose Bank B because its EAR is higher. You would choose Bank A because its nominal interest rate is higher. You would choose Bank B because its nominal interest rate is higher. You are indifferent between the banks and your decision will be based upon which one offers you a gift for opening an account. -Select-IIIIIIIVVItem 1 b. Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year? Assume that your funds must be left on deposit during an entire compounding period in order to receive any interest. If funds must be left on deposit until the end of the compounding period (1 year for Bank A and 1 day for Bank B), and you think there is a high probability that you will make…arrow_forward
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