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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

Aging of receivables schedule

The accounts receivable clerk for Kirchhoff Indus tries pre pared the following partially completed aging of receivables schedule as of the end of business on August 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
Conover Industries $30,000 March 22
Keystone Company 18,000 July 1
Moxie Creek Inc. 9,000 July 25
Rainbow Company 26,400 September 10
Swanson Company 46,600 August 3
  1. a. Determine the number of days past due for each of the preceding accounts as of August 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 August 31.

Explanation

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

Account Balance Due Date Number of days past due
C Industries $30,000 March 22 162 days
K Company $18,000 July 1 61 days
MC Incorporation $9,000 July 25 37 days
R Company $26,400 September 10 Not past due
S Company $46,600 August 3 28 days

Table (1)

Working note:

Calculate number of days past due for each account.

C Industries Account Past due days
Number of days from March 23 to 31 9 days
Number of days from April 1 to 31 31 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
Num...

(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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