Concept explainers
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.
Allowance method:
It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method,
Write-off:
Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.
To Journalize: The
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FINANCIAL ACCOUNTING>IC<
- The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of owners equity. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 50,000. 4. Briefly explain how multiple-step and single-step income statements differ.arrow_forwardIn December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of S4,500 for services to be performed in January 2020. Swanstrom also receives the December utility bill for S600 but does not pay this bill until 2020. For 2019, under the accrual basis of accounting, Swanstrom would recognize: a. $8,000 of revenue and $600 of expense. b. $8,000 of revenue and $0 of expense. c. $3,500 of revenue and $600 of expense. d. $3,500 Of revenue and $0 of expense.arrow_forwardOn January 24, 20Y8, Niche Consulting collected $5,700 it had hilled its clients for services rendered on December 31, 20Y7. How would you record the January 24 transaction, using the accrual basis? A. Increase Cash, $5,700; decrease Fees Earned, $5,700 B. Increase Accounts Receivable, $5,700; increase Fees Earned, $5,700 C. Increase Cash, $5,700; decrease Accounts Receivable, $5,700 D. Increase Cash, $5,700; increase Fees Earned, $5,700arrow_forward
- Review the following transactions and prepare any necessary journal entries. A. On January 5, Bunnet Co. purchases 350 aprons (Supplies) at $25 per apron from a supplier, on credit. Terms of the purchase are 3/10, n/30 from the invoice date of January 5. B. On February 18, Melon Construction receives advance cash payment from a client for construction services in the amount of $20,000. Melon had yet to provide construction services as of February 18. C. On March 21, Noonan Smoothies sells 875 smoothies for $4 cash per smoothie. The sales tax rate is 6.5%. D. On June 7, Organic Methods paid a portion of their noncurrent note in the amount of $9,340 cash.arrow_forwardA furniture store received an invoice from a supplier for $12282 dated July 13, 2022 with terms 5/10, 2/20, n/60. A partial payment, in the amount of $5373 is made on July 20. What amount is credited to the account? Boyd Industries received an invoice dated September 4, 2021 with terms 2.5/10, n/30. The amount stated on the invoice was $6386. What is the amount due on September 10 if the invoice is to be paid in full? A set of weights has a list price of $97. If discounts of 14%, 10% and 3% are offered, what is the single equivalent discount rate (SEDR) that was given? Write your final answer as a percent rounded to 2 decimal places. A microwave oven has a list price of $93 less discounts of 16%, 5% and 2%. What is the net price of the microwave oven? Beatles Office Products bought a desk for $735 and plans a mark up of $626. During a clearance sale, they decided to mark down the regular selling price of the desk by 16%. What was the clearance sale price of the desk?…arrow_forwardAt October 1, 2022, Kingbird, Inc. had an Accounts Payable balance of $159600. During the month, the company made purchases on account of $114000 and made payments on account of $182400. At October 31, 2022, the Accounts Payable balance is $159600 debit $22800 credit $182400 credit $91200 creditarrow_forward
- The Gloria Dimen Company presented the following information pertaining to accounts that will need adjustments for its November 30, 2021, year-end financial statements: On October 1, 2021, Gloria Dimen Company paid P10,080 for 6 months' insurance premiums The balance in the ledger account Office Supplies amounted to P32,000. A count of the office supplies on November 30,2021 totaled P12,800. Gloria Dimen Company received P22,800 on November 1, 2021 from a customer for services to be rendered during the months of November, December, January, and February. Gloria Dimen acquired Office Equipment costing P352,800 on April 1, 2021. The equipment is expected to last 5 years after which it will be worthless. Assume that November 30, 2021 is a Friday and that Gloria Dimen pays its employees a total of P87,500 on Saturday.arrow_forwardOn December 12, 2024, Park Electronics received $24,000 from a customer toward a cash sale of $240,000 of diodes to be completed on January 16, 2025. What journal entries should Park record on December 12 and January 16? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.arrow_forwardWhat amount must be remitted if invoices dated August 23 for $810, September 13 for $780 and September 22 for $905, all terms 2/10 E.O.M., are paid together on October 5? DCM Clocks received the following two invoices from its supplier: $25,000 on August 29, 2014 and $24,000 on September 8, 2014. If the payment terms on both the invoices were 2.5/10, 1/20, n/60, calculate the amount that must be paid by DCM Clocks to settle both of these invoices on September 18, 2014. David, the owner of a brewery in Toronto, receives a shipment of barley on August 1, 2014 with an invoice dated July 24, 2014 valued at $39,900 and cash discount payment terms 2/10, n/30, R.O.G. What cash discount would he receive if the invoice is settled on the following dates? August 4, August 11, August 24arrow_forward
- Below are four transactions that were completed during 2016 by Timber Lodge. Provide any related journal entries (including both active and passive entries) for the fiscal year ended on December 31. A. On July 1, 2016, Timber Lodge paid a two-year insurance premium $8000 for a policy on its facilities. B. On December 31, 2016, a tenant renting some storage space from Timber Lodge had not paid the rent of $750 for December. C. On September 1, 2016, Timber Lodge borrowed $25,000 cash and gave a one-year, 6 percent, note payable. The interest is payable on the note's due date of August 31, 2017. D. On October 1, 2016, Timber Lodge collected $10,000 from a tenant for two years rent beginning October 1, 2016. E. On Jan 1, 2016, Timber Lodge had $1000 supplies at hand. It purchased $6000 on Oct 23. On December 31, the annual physical count shows it had $2000 remaining supplies.arrow_forwardXYZ Co. is an HST registrant and started business on Feb 1, 2021. In February, they purchased $100,000 of inventory, had sales of $125,000, and purchased $30,000 of equipment. All purchases and sales were subject to 15% HST. How much HST is owed/owing (refund) for February? Prepare the journal entries to record the transactions for February. Please do in EXCEL with clear formatarrow_forwardOn August 1, 2021, Vixen Ltd. received $54,000 cash from a tenant for one year of rent in advance, and recorded the transaction as unearned revenue. The December 31, 2021 required adjusting entry for this transaction would be: Question 5 options: DR Rent revenue 31,500; CR Unearned revenue 31,500 DR Unearned revenue 22,500; CR Rent revenue 22,500 DR Rent revenue 22,500; CR Unearned revenue 22,500 DR Unearned revenue 31,500; CR Rent revenue 31,500 Beachroamers Inc. decided to discontinue its sculptured driftwood division on June 30, 2021. From January through June of 2021, the division had a loss of $25,000 before operations were stopped. The assets of this division have a carrying value of $575,000, and the company is actively marketing the sale of the division for $550,000, less selling costs of $5,000. Beachroamer's corporate tax rate is 25%. On December 31, the company has not yet received an offer…arrow_forward
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