Chapter 8, Problem 43P

Accounting for foreign currency - denominated receivables and payables - multiple years The accounts of Lin, a U.S. corporation, show $81,300 accounts receivables and $38,900 accounts payable at December 31, 2016, before adjusting entries are made. An analysis of the balances reveals the following Accounts Receivable        Receivable Dominated in US dollars                           $28,500        Receivable Dominated in 20,000 Swedish krona         $11,800        Receivable Dominated in 25,000 British pounds         $41,000                Total                                                                     $81,300 Accounts Payable        Payable dominated in US dollars                                $6,850        Payable dominated in 10,000 canadian dollars          $7,600        Payable dominated in 15,000 British pounds             $24,450               Total                                                                      $38,900 Current exchange rates for Swedish krona,…

For several years, Xtreme Co's sales have been on a "cash only" basis. On January 1, 2011, however, Xtreme Co. began offering credit on terms of n/30. The amount of the adjusting entry to record the estimated uncollectible receivables at the end of each year has been 1/2 of 1% of credit sales, which is the rate reported as the average for the industry. Credit sales and the year-end credit balances in Allowance for Doubtful Accounts for the past four years are as follows:   Year Credit Sales Allowance for Doubtful Accounts 2011 4,000,000 5,000 2012 4,400,000  8,250  2013  4,800,000  10,200  2014  5,100,000  14,400  Laurie Jones, president of Xtreme Co., is concerned that the method used to account for and writeoff uncollectible receivables is unsatisfactory. She has asked for your advice in the analysis of past operations in this area and for recommendations for change.     INSTRUCTION: Determine the amount of (a) the addition to Allowance for Doubtful Accounts and (b)…

Record the write off for bad debts based on the this information: Alpha Company's accounts receivable and allowance for doubtful accounts balances were RM100000 and RM14000 (credit) respectively, at the beginning of 2012. During 2012, a customer defaults on a RM12000 balance related to goods purchased during 2011. By the end of the year, the company had mad credit sales of RM2400000 and collected RM2200000 on account. Estimates 1 percent of its credit sales will default.