Exercise 7-11 (Algo) Unearned revenues—customer deposits LO 3 Skip to question [The following information applies to the questions displayed below.] NightWoundsTime Brewing Co. distributes its products in an aluminum keg. Customers are charged a deposit of $40 per keg; deposits are recorded in the Keg Deposits account. Exercise 7-11 (Algo) Part c - Journal entry c-2. A keg use analyst who works for NightWoundsTime estimates that 430 kegs for which deposits were received during the year will never be returned. Record the accounting that would be appropriate for the deposits associated with these kegs? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Bad Debts
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.
Exercise 7-11 (Algo) Unearned revenues—customer deposits LO 3
Skip to question
[The following information applies to the questions displayed below.]
NightWoundsTime Brewing Co. distributes its products in an aluminum keg. Customers are charged a deposit of $40 per keg; deposits are recorded in the Keg Deposits account.
Exercise 7-11 (Algo) Part c - Journal entry
c-2. A keg use analyst who works for NightWoundsTime estimates that 430 kegs for which deposits were received during the year will never be returned. Record the accounting that would be appropriate for the deposits associated with these kegs? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
