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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Number of days past due

Toot Auto Supply distributes new and used automobile parts to local dealers throughout the Midwest. Toot’s credit terms are n/30. As of the end of business on October 31, the following accounts receivable were past due:

Account Due Date Amount
Avalanche Auto August 8 $12,000
Bales Auto October 11 2,400
Derby Auto Repair June 23 3,900
Lucky’s Auto Repair September 2 6,600
Pit Stop Auto September 19 1,100
Reliable Auto Repair July 15 9,750
Trident Auto August 24 1,800
Valley Repair & Tow May 17 4,000

Determine the number of days each account is past due as of October 31.

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 as of October 31.

Explanation

Determine the number of days each account is past due as of October 31.

Account Due Date Number of days past due
A Auto August 8 84 days
B Auto October 11 20 days
D Auto Repair June 23 130 days
L’s Auto Repair September 2 59 days
P Stop Auto September 19 42 days
R Auto Repair July 15 108 days
T Auto August 24 68 days
V Repair & Tow May 17 167 days

Table (1)

Working note:

Calculate number of days past due for each account.

A Auto Account Past due days
Number of days from August 9 to 31 23 days
Number of days from September 1 to 30 30 days
Number of days from October 1 to 31 31 days
Total 84 days

Table (2)

B Auto Account Past due days
Number of days from October 12 to 31 20 days
Total 20 days

Table (3)

D Auto Repair Account Past due days
Number of days from June 24 to 30 7 days
Number of days from July 1 to 31 31 days
Number of days from August 1 to 31 31 days
Number of days from September 1 to 30 30 days
Number of days from October 1 to 31 31 days
Total 130 days

Table (4)

L’s Auto Repair Account

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