Chapter 8, Problem 44P

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)…

Honduras Company revealed a balance of P8,200,000 in the accounts receivable control account at year-end.                   An analysis of the accounts receivable showed the following:                   Accounts known to be worthless     100,000   Advance payments to creditors on purchase orders     400,000   Advances to affiliated entities     1,000,000   Customers' accounts reporting credit balances arising           from sales returns   -600,000   Interest recivable on bonds     400,000   Trade accounts receivable-unassigned     2,000,000   Subscription receivable due in 30 days     2,200,000   Trade accounts receivable-assigned (Finance           Company's equity asigned accounts is P500,000)   1,500,000   Trade installments receivable due in 1-18 months,           including unearned finance charge of P50,000   850,000   Trade accounts receivable from officers, due currently     150,000   Trade…

The following information relates to Maharlika Corporation for the year ended June 30, 2021. Sales revenue 450000 Opening balance of trade receivables (net of allowance) 100000 Closing balance of trade receivable (net of allowance) 132500 Doubtful debt expense 5000 Increase in allowance for doubtful debts 2000 Bad debts are written off against the allowance for doubtful debts. What is the amount of cash collected from the customers during the year ended June 30, 2021? 487,500 481,500 418,500 412,500

Anth Company has significant amounts of trade accounts receivable. Anth uses the allowance method to estimate bad debts instead of the specific write-off method. During the year, some specific accounts were written off as uncollectible, and some that were previously written off as uncollectible were collected. Anth also has some interest-bearing notes receivable for which the face amount plus interest at the prevailing rate of interest is due at maturity. The notes were received on July 1, 2018, and are due on June 30, 2019. Required: A. what are the deficiencies of the direct write-off method? B. What are the two basic allowance methods used to estimate bad debts, and what is the theoretical justification for each? C. How should Anth account for the collection of the specific accounts previously written off as uncollectible? D. How should Anth report the effects of the interest-bearing notes receivable on its December 31, 2018, balance sheet and its income statement for the year ended…

A company has the following information for the year 2015. Accounts Receivables, beginning of the year USD 420, 000 Accounts Receivable, year ending, before any write-off USD 490, 000 Allowance for Doubtful Accounts, beginning of the year USD 15, 000 Sales for the Year Ended Dec 31, 2015 USD 1, 650, 000 If the company wrote off USD 13,000 in uncollectible receivables in 2015 and estimated bad debts to be USD 27, 000 for the year 2015 using the allowance method (this amount is the balance of Allowance for Doubtful Accounts for the year ending December 31, 2015), what is the cash realizable value of the AR?

(a)  NYPSMANN   Limited's  Cashbook at  30th  November  2015  showed  an  overdrawn position   of   GH¢ 185,500   although    the   bank   statement    showed    only   GH¢ 105,900 overdrawn.   Detailed examination of the two records revealed the following:   The debit side of the cash book had been undercast by GH¢ 15,000.   A cheque for GH¢78,000 in favor of DEM Suppliers Ltd, had been omitted by the   bank   from   its   statement,  the   cheque   having   been   debited   to   another   customer's account.   A cheque for GH¢9, 100 drawn in payment of the telephone account had been entered in the cash book as GH(C6,400 but was shown correctly on the bank statement.   A cheque for GH¢ 10,500 from A books having been paid into the bank was dishonoured and shown as such on the bank statement although no entry  relating to the dishonour  had been made in the cash book. The bank had debited  a cheque  for GH¢6,300  to NYPSMANN's  account  in error;  it   should have been debited…

Create a ledger of Account Receivable and ledger of AFDD to find the bad debt by using 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.

Robertson's account balances at the business year-end show a figure for trade receivables of £103,100. Included in this figure is an amount of £6,500 owed by Reece, which will not be received. Robertson usually creates a provision for doubtful debts of 2% of trade receivables.  The figure for trade receivables on the statement of financial position at the year-end should be:

The beginning Accounts Receivable and Allowance for Doubtful Accounts balances of ABC Corporation are P500,000 and P50,000. Net credit sales totaled P4,500,000 during the year while collections amounted to P4,400,000. Bad debts expense for the year is P30,000. Included in the collections was a P10,000 account that was written off in the prior year and was recovered during the current year. What is the net realizable value of the Accounts Receivable as of the end of the year? The answer is 520000. Explain how can we arrive at this answer.