Chamberlain Enterprises Incorporated reported the following receivables in its December 31, 2024, year-end balance sheet: Current assets: Accounts receivable, net of $36,000 in allowance for uncollectible accounts Interest receivable Notes receivable Additional Information: $ 278,000 13,600 380,000 1. The notes receivable account consists of two notes, a $60,000 note and a $320,000 note. The $60,000 note is dated October 31, 2024, with principal and interest payable on October 31, 2025. The $320,000 note is dated June 30, 2024, with principal and 8% interest payable on June 30, 2025. 2. During 2025, sales revenue totaled $1,460,000, $1,340,000 cash was collected from customers, and $34,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable. 3. On March 31, 2025, the $320,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 10%. Chamberlain accounts for the discounting as a sale. Required: 1. In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain's 2025 income statement? 2. & 3. What amounts will appear in the 2025 year-end balance sheet for accounts receivable? Calculate the receivables turnover ratio for 2025
Chamberlain Enterprises Incorporated reported the following receivables in its December 31, 2024, year-end balance sheet: Current assets: Accounts receivable, net of $36,000 in allowance for uncollectible accounts Interest receivable Notes receivable Additional Information: $ 278,000 13,600 380,000 1. The notes receivable account consists of two notes, a $60,000 note and a $320,000 note. The $60,000 note is dated October 31, 2024, with principal and interest payable on October 31, 2025. The $320,000 note is dated June 30, 2024, with principal and 8% interest payable on June 30, 2025. 2. During 2025, sales revenue totaled $1,460,000, $1,340,000 cash was collected from customers, and $34,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable. 3. On March 31, 2025, the $320,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 10%. Chamberlain accounts for the discounting as a sale. Required: 1. In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain's 2025 income statement? 2. & 3. What amounts will appear in the 2025 year-end balance sheet for accounts receivable? Calculate the receivables turnover ratio for 2025
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:Chamberlain Enterprises Incorporated reported the following receivables in its December 31, 2024, year-end balance sheet:
Current assets:
Accounts receivable, net of $36,000 in allowance for
uncollectible accounts
Interest receivable
Notes receivable
Additional Information:
$ 278,000
13,600
380,000
1. The notes receivable account consists of two notes, a $60,000 note and a $320,000 note. The $60,000 note is dated October
31, 2024, with principal and interest payable on October 31, 2025. The $320,000 note is dated June 30, 2024, with principal and
8% interest payable on June 30, 2025.
2. During 2025, sales revenue totaled $1,460,000, $1,340,000 cash was collected from customers, and $34,000 in accounts
receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the
allowance account to an amount equal to 10% of year-end accounts receivable.
3. On March 31, 2025, the $320,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 10%.
Chamberlain accounts for the discounting as a sale.
Required:
1. In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain's 2025 income
statement?
2. & 3. What amounts will appear in the 2025 year-end balance sheet for accounts receivable? Calculate the receivables turnover ratio
for 2025.
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