Concept explainers
Receivables
Receivables refer to an amount to be received in future. General classifications of receivables are accounts receivable, note receivable, and other receivables.
Accounts receivable
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.
Note receivable
Note receivable refers to a written promise by the debtor for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to the lender or creditor. Notes receivable is an asset of a business.
Other receivables
Other receivables such as interest receivables, loan to company officers, advances to employees, income taxes refundable are non-trade receivables as these are not resulted from sales transaction or business operations.
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- Berry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales for the year are $924,123. The balance at the end of 2017 was $378,550. What is the number of days sales in receivables ratio for 2018 (round all answers to two decimal places)?arrow_forwardBristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.arrow_forwardInk Records recorded $2,333,898 in credit sales for the year and $1,466,990 in accounts receivable. The uncollectible percentage is 3% for the income statement method and 5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $20,254; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.arrow_forward
- At December 31, 2016, Pronghorn Corp Imports reported this information on its balance sheet. Accounts receivable $632,300 Less: Allowance for doubtful accounts 36,420 During 2017, the company had the following transactions related to receivables. 1. Sales on account $2,931,300 2. Sales returns and allowances 107,220 3. Collections of accounts receivable 2,578,700 4. Write-offs of accounts receivable deemed uncollectible 42,440 5. Recovery of bad debts previously written off as uncollectible 16,490 Prepare the journal entry to record bad debt expense for 2017, assuming that aging the accounts receivable indicates that estimated bad debts are $53,520. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Compute the accounts receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.) Accounts receivable turnover Type your answer here times Compute the average collection…arrow_forwardAt December 31, 2016, Pronghorn Corp Imports reported this information on its balance sheet. Accounts receivable $632,300 Less: Allowance for doubtful accounts 36,420 During 2017, the company had the following transactions related to receivables. 1. Sales on account $2,931,300 2. Sales returns and allowances 107,220 3. Collections of accounts receivable 2,578,700 4. Write-offs of accounts receivable deemed uncollectible 42,440 5. Recovery of bad debts previously written off as uncollectible 16,490 Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2. 3.…arrow_forwardSunland Company had the following balances in receivable accounts at October 31, 2022 (in thousands): Allowance for Doubtful Accounts $52,Accounts Receivable $3,034, Other Receivables $201, and Notes Receivable $1,396. Prepare the balance sheet presentation of Sunland Company's receivables in good form. Sunland Company Balance Sheet (Partial) (in thousands) $ $ $arrow_forward
- During August 2024, Yond Company recorded the following: • Sales of $51,100 ($44,000 on account; $7,100 for cash). Ignore Cost of Goods Sold. • Collections on account, $33,800. • Write-offs of uncollectible receivables, $1,900. • Recovery of receivable previously written off, $200. Date Aug. Accounts and Explanation Debit Credit Requirements Journalize Yond's transactions during August 2024, assuming Yond uses the direct write-off method. 1. 2. Journalize Yond's transactions during August 2024, assuming Yond uses the allowance method.arrow_forwardAt December 31, 2018, Oriole Company reported the following information on its balance sheet. Accounts receivable $948,000 Less: Allowance for doubtful accounts 78,000 During 2019, the company had the following transactions related to receivables. 1. Sales on account $3,609,930 2. Sales returns and allowances 51,000 3. Collections of accounts receivable 2,756,000 4. Write-offs of accounts receivable deemed uncollectible 97,000 5. Recovery of bad debts previously written off as uncollectible 28,000 Compute the accounts receivable turnover for 2019, assuming the expected bad debt information provided in (c). (Round answer to 2 decimal places, e.g. 25.25.)arrow_forwardUsing the following accounts, complete all journal entries: Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Credit Card Expense Sales Discount Sales Revenue For the year 2019, Bristax Corporation recorded $1,385,660 in credit sales and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. PLEASE NOTE: You must enter the account names exactly as written in the table above and all whole dollar amounts using "$" with commas as needed and rounded to two decimal places (i.e. $12,345.67). Record the year-end adjusting entry for 2019 bad debt using the income statement method. DR CR Record the year-end adjusting entry for 2019 bad debt using the balance sheet method. DR CR Assume there was a previous credit balance in Allowance for Doubtful Accounts of $37,430, record the year-end adjusting entry for bad debt using the income…arrow_forward
- Monarch Map Company's balance sheet at December 31, 2018, reported the following: Accounts receivable.... $80,000 Less: Allowance for uncollectible accounts.. 5,000 Requirements (1) How much of the receivable did Monarch expect to collect? Stated differently, what was the net realizable value of these receivables? (2) Journalize, without explanations, 2019 entries for Monarch: a. Total credit sales for 2019 were $80,000, Monarch received cash payments on account during 2018 of $65,000. b. Accounts receivable identified to be uncollectible totaled $2,500. c. December 31, 2019, aging of receivables indicates that $3,200 of the receivables is uncollectible (target balance). (3) Post the transactions to the Accounts receivable and the Allowance for uncollectible accounts T-accounts. Calculate and report Monarch's receivables and related allowance on the December 31, 2019 balance sheet. What is the net realizable value of receivables at December 31, 2019? How much is the uncollectible…arrow_forwardJohnson company’s financial year ended on December 31, 2010. All thetransactions related to the company’s uncollectible accounts are can be found below: The accounts receivable account had a balance of $114,630 and the beginning balance in the allowance for uncollectible accounts was $6,200. Required: Prepare the balance sheet extract as at Dec 31 to show the net realizable value for the Accounts Receivable.arrow_forwardI need the answer on number 15 only. Thanks 1.The 2017 year-end balances of Accounts Receivable and Allowance for Doubtful Accounts are $1,000,000 and $100,000, respectively. Complete the net realizable value (net accounts receivable) presentation at 12/31/2017. Do not use decimals. 2.Prepare the journal entry to record 2018 total sales: $3,000,000, of which $2,200,000 are on account. Do not use decimals. [Note: enter cash sales in the first line.] 3.Compute the net realizable value (net accounts receivable) presentation after the journal entry to record 2018 sales. Do not use decimals. 4.Prepare the journal entry to record $2,700,000 of accounts receivable collected in 2018. Do not use decimals. 5.Compute the net realizable value (net accounts receivable) presentation after the two journal entries to record 2018 sales and 2018 collections. Do not use decimals. 6.Prepare the journal entry to record $25,000 of write-offs in 2018. Do not use decimals. 7.Compute the net realizable value…arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College