Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 8, Problem 8.1E
Determine proper classification of liabilities (LO8–1)
Match (by letter) the correct reporting method for each of the items listed below.
Reporting Method
C = Current liability
L = Long-term liability
D = Disclosure note only
N = Not reported
Item | |
_____ | 1. Accounts payable. |
_____ | 2. Current portion of long-term debt. |
_____ | 3. Sales tax collected from customers. |
_____ | 4. Notes payable due next year. |
_____ | 5. Notes payable due in two wars. |
_____ | 6. Advance payments from customers. |
_____ | 7. Commercial paper |
_____ | 8. Unused line of credit. |
_____ | 9. A |
_____ | 10. A contingent liability with a reasonably possible likelihood of occurring within the next year and can be estimated. |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Questions:
a. What is the correct bad debt expense for the year assuming that the allowance for doubtful accounts had a balance of P120,500 as of January 1, 2022?
b. Your proposed adjusting journal entry to correct the balance of allowance for bad debts would include a net debit or credit of? (just indicate the amount)
What are the balances of accounts receivable, related allowance account, and bad debts expense on December 31, 2021?
A. P7,092,000, P1,110,130, and P756,130
B. P9,616,000, P1,653,370, and P756,130
C. P9,616,000, P1,791,610, and P1,437,610
D. P9,104,000, P1,653,370, and P1,299,370
The following is a portion of the current assets section of the balance sheets of Avanti's, Inc., at December 31, 2020 and 2019:
12/31/20
12/31/19
Accounts receivable, less allowance for baddebts of $9,750 and $15,336, respectively
$179,866
$225,851
Required:a. If $11,849 of accounts receivable were written off during 2020, what was the amount of bad debts expense recognized for the year? (Hint: Use a T-account model of the Allowance account, plug in the three amounts that you know, and solve for the unknown.)
b. The December 31, 2020, Allowance account balance includes $3,034 for a past due account that is not likely to be collected. This account has not been written off.(1) If it had been written off, will there be any effect of the write-off on the working capital at December 31, 2020?
Yes
No
(2) If it had been written off, will there be any effect of the write-off on net income and ROI for the year ended December 31, 2020?
Yes
No
c. The…
Chapter 8 Solutions
Financial Accounting
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Provide examples of current liabilities in the...Ch. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - How does commercial paper differ from a normal...Ch. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 15RQCh. 8 - Prob. 16RQCh. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22RQCh. 8 - Prob. 23RQCh. 8 - Record notes payable (LO82) Flip Side of BE82 On...Ch. 8 - Prob. 8.2BECh. 8 - Record notes receivable (LO82) Flip Side of BE81...Ch. 8 - Determine interest expense (LO82) Record...Ch. 8 - Prob. 8.5BECh. 8 - Record deferred revenues (LO84) On December 18,...Ch. 8 - Prob. 8.7BECh. 8 - Prob. 8.8BECh. 8 - Prob. 8.9BECh. 8 - Prob. 8.10BECh. 8 - Prob. 8.11BECh. 8 - Prob. 8.12BECh. 8 - Prob. 8.13BECh. 8 - Prob. 8.14BECh. 8 - Prob. 8.15BECh. 8 - Determine proper classification of liabilities...Ch. 8 - Prob. 8.2ECh. 8 - Prob. 8.3ECh. 8 - Prob. 8.4ECh. 8 - Determine interest expense (LO82) OS Environmental...Ch. 8 - Record a line of credit (LO82) The following...Ch. 8 - Calculate payroll withholdings and payroll taxes...Ch. 8 - Record payroll (LO83) During January, Luxury...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Analyze and record a contingent liability (LO85)...Ch. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Complete the accounting cycle using current...Ch. 8 - Prob. 8.1APCh. 8 - Prob. 8.2APCh. 8 - Prob. 8.3APCh. 8 - Record Payroll (LOS3) Vacation Destinations offers...Ch. 8 - Prob. 8.5APCh. 8 - Prob. 8.6APCh. 8 - Prob. 8.7APCh. 8 - Prob. 8.8APCh. 8 - Selected financial data regarding current assets...Ch. 8 - Prob. 8.1BPCh. 8 - Prob. 8.2BPCh. 8 - Prob. 8.3BPCh. 8 - Record Emily Turnbull, president of Aerobic...Ch. 8 - Prob. 8.5BPCh. 8 - Logins Roadhouse opened a new restaurant in...Ch. 8 - Record contingencies (LO85) Compact Electronics is...Ch. 8 - Prob. 8.8BPCh. 8 - Calculate and analyze rates (LO86) Selected...Ch. 8 - Great AdventuresContinuing Problem (This is a...Ch. 8 - Prob. 8.2APFACh. 8 - Prob. 8.3APFACh. 8 - Comparative Analysis American Eagle Outfitters,...Ch. 8 - Prob. 8.5APECh. 8 - Written Communication Western Manufacturing is...Ch. 8 - Earnings Management Quattro Technologies, a...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Tines Commerce computes bad debt based on the allowance method. They determine their current years balance estimation to be a credit of $45,000. The previous period had a credit balance in Allowance for Doubtful Accounts of $12,000. What should be the reported figure in the adjusting entry for the current period? A. $12,000 B. $45,000 C. $33,000 D. $57,000arrow_forwardJD Company decided on January 2, 2022 to effect the change in accounting policies in relation to bad debts as follows: Bad debt percentage rom 2% to 10% of accounts receivable. JD Company's receivable balance at December 31, 2022 was 960,000, and the allowance for bad debt account has a debit balance of P7,000. What is the 2022 carrying value of the accounts receivable? a. 857,000 b. 960,000 c. 878,000 d. 864,000arrow_forwardE9.8 (LO 2), AP On December 31, 2021, when its Allowance for Doubtful Accounts had a zero balance, Ling Co. estimated that 2% of its net accounts receivable of $450,000 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Ling Co. determined that the Jeff Shoemaker account was uncollectible and wrote off $1,100. On June 12, 2022, Shoemaker paid the amount previously written off. Instructions A. Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. Journalize entries for the sale of accounts receivable.arrow_forward
- PA6. 9.2 Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% for the balance sheet method. Record the year-end adjusting entry for 2018 bad debt using the income statement method. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $13,888; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.arrow_forwardE8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $170,000, of which $85,000 was on credit. At the start of 2021, Accounts Receivable showed a $10,000 debit balance and the Allowance for Doubtful Accounts showed a $600 credit balance. Collections of accounts receivable during 2021 amounted to $68,000. Data during 2021 follow: a.On December 10, a customer balance of $1,500 from a prior year was determined to be uncol- , so it was written off. lectible b. December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. b. On Required: 1. Give the required journal entries for the two events in December. 2.Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2021. 13 On the basis of the data…arrow_forwardTrue or False 1. if a credit risk has not increased significantly since initial recognition, an entity may recognize a loss allowance equal to 12-month expected credit loss 2. the effect of direct origination cost is a decrease in the effective interest rate of a loan receivable 3. The impairment model under IFRS 9 are applicable to all debt instrument including those that are measured at fair value through profit or loss 4. the impairment model under IFRS 9 are applicable to all debt instruments including those that are measured at fair value through profit or loss 5.arrow_forward
- 1. How much should be reported as bad debts expense for the year ended December 31, 2020? 2. What is the net realizable value of the Accounts receivables on December 31, 2020?arrow_forwardQuestion 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.arrow_forwardE7.8 (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_forward
- Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $16700. If the balance of the Allowance for Doubtful Accounts is $2070 credit before adjustment, what is the amount of bad debt expense for that period? $16700 $2070 $14630 $18770arrow_forward2.Which of the following statements is valid? a. Net accounts receivable is not affected by a recovery of an account previously written off. b. A three year, non-interest bearing promissory note is initially recorded in the accounts at its face value. c. When individual customers' accounts have credit balances of material amounts, these amounts must be deducted from the debit balance in other customers' accounts in the statement of financial position. d. When the rate stated on a note is greater than the prevailing market rate of interest for similar obligations, the present value of the note at initial recognition is greater than its face value.arrow_forwardDesigners Guild had a 1/1/21 balance in the Allowance for Doubtful Accounts of P12,000. During 2021, it wrote off P8,000 of accounts and collected P3,500 on accounts previously written off. The balance in Accounts Receivable was P220,000 at 1/1 and P260,000 at 12/31. At 12/31/21, Designers Guild estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2021?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License