Preblem 4-2 (IAA)Credible Company provided the following T-accountsummarizing the transactions affecting the accounts receivablefor the current year:Accounts Receivable600.000 Collections from customers 5,300,00035,000Jan. 1 balanceCharge salesShareholders'6,000,000 WriteoffMerchandise returns40,000subscriptionsDeposit on contractClaims against commoncarrier for damagesIOUS from employeesCash advance to affiliates 100,000Advahces to a supplier200,000 Allowances to customerfor shipping damagesCollections on carrier claims100,000| Collection on subscriptions25,000120,00040,00050,00010,00050,000Required:a. Compute the correct amount of accounts receivable.b. Prepare one compound entry to adjust the accounts receivable.c. Compute the amount to be presented as "trade and otherreceivables" under current assets.d. Indicate the classification and presentation of the other items.

Name: Preblem 4-2 (IAA)Credible Company provided the following T-accountsum
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Description: Preblem 4-2 (IAA)Credible Company provided the following T-accountsummarizing the transactions affecting the accounts receivablefor the current year:Accounts Receivable600.000 Collections from customers 5,300,00035,000Jan. 1 balanceCharge salesShare

Solution: Introduction: Accounts Receivable means the amount of money payable(owe) to the company…

Business

Accounting

a. Compute the correct amount of accounts receivable. b. Prepare one compound entry to adjust the accounts receivable. c. Compute the amount to be presented as "trade and othem receivables" under current assets. d Indicote the olege

a. Compute the correct amount of accounts receivable. b. Prepare one compound entry to adjust the accounts receivable. c. Compute the amount to be presented as "trade and othem receivables" under current assets. d Indicote the olege

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Question

Preblem 4-2 (IAA)
Credible Company provided the following T-account
summarizing the transactions affecting the accounts receivable
for the current year:
Accounts Receivable
600.000 Collections from customers 5,300,000
35,000
Jan. 1 balance
Charge sales
Shareholders'
6,000,000 Writeoff
Merchandise returns
40,000
subscriptions
Deposit on contract
Claims against common
carrier for damages
IOUS from employees
Cash advance to affiliates 100,000
Advahces to a supplier
200,000 Allowances to customer
for shipping damages
Collections on carrier claims
100,000| Collection on subscriptions
25,000
120,000
40,000
50,000
10,000
50,000
Required:
a. Compute the correct amount of accounts receivable.
b. Prepare one compound entry to adjust the accounts receivable.
c. Compute the amount to be presented as "trade and other
receivables" under current assets.
d. Indicate the classification and presentation of the other items.

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