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Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
ISBN: 9781337398169

Solutions

BuyFindarrow_forward

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
ISBN: 9781337398169
Textbook Problem

Aging of receivables schedule

The accounts receivable clerk for Evers Industries prepared the following partially completed aging of receivables schedule as of the end of business on July 31:

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The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals:

Customer Balance Due Date
Boyd Industries $36,000 April 7
Hodges Company 11,500 May 29
Kent Creek Inc. 6,600 June 8
Lockwood Company 7,400 August 10
Van Epps Company 13,000 July 2
  1. A. Determine the number of days past clue for each of the preceding accounts as of July 31.
  2. B. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.

A.

To determine

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.

Due date:

Due date is the maturity date on note/account, on due date the borrower is supposed to pay the debt.

Past due:

Past due is the number of days of not receiving/making payment on the overdue account.

To determine: The number of days each account is past due for the omitted accounts as of July 31.

Explanation

Working note:

Calculate number of days past due for each account.

B Industries Account Past due days
Number of days from April 8 to 30 23 days
Number of days from May 1 to 31 31 days
Number of days from June 1 to 30 30 days
Number of days from July 1 to 31 31 days
Total 115 days

Table (2)

H Company Account Past due days
Number of days from May 30 to 31 2 days
Number of days from June 1 to 30 30 days
Number of days from July 1 to 31

B.

To determine

To complete: The aging of receivables schedule, by adding the omitted accounts to the bottom of the schedule and update the totals.

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