Explanation Account receivable: The amount of money to be received by a company for the sale of goods and services to the customers is referred to as account receivable. Date Account Titles and explanation Debit ($) Credit ($) Accounts receivable 100,000 Sales 100,000 (To record the sale made ) Table (1) Accounts receivable is an asset and there is an increase in the value of asset. Hence, debit the accounts receivable by $100,000. Sales (Revenue) are a component of stockholder’s equity and there is an increase in the value of equity. Hence, credit the sales by $100,000. Date Account Title and Explanation Debit Credit Cash (2) 54,600 Factory expense (1) 8,400 Receivables from factor (3) 7,000 Accounts receivable 70,000 ( To record sale of receivables to the factor) Table (2) Cash is an asset and there is an increase in the value of an asset. Hence, debit the cash by $54,600. Factory expense is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the factory expense by $8,400. Receivables from factor are an asset and there is an increase in the value of asset. Hence, debit the receivables from factor by $7,000. Accounts receivable is an asset and there is a decrease in the value of asset. Hence, credit the accounts receivable by $70,000. Date Account Title and Explanation Debit in $ Credit in $ Cash ( $ 7 , 000 − $ 1 , 316 ) 5,684 Sales revenue (4) 1,316 Receivables from factor 7,000 ( To record collection of remaining factory receivables by giving discount) Table (3) Cash is an asset and there is an increase in the value of an asset. Hence, debit the cash by $5,684. Sales revenue is component of stockholder’s equity and there is a decrease in the value of revenue. Hence, debit the sales revenue by $1,316. Receivables from factor are an asset and there is a decrease in the value of asset. Hence, debit the receivables from factor by $7,000. Date Account Titles and explanation Debit ($) Credit ($) Cash 29,424 Sales revenue (5) 576 Accounts receivable ( $ 100 , 000 − $ 70 , 000 ) 30,000 (To record the sale made ) Table (4) Cash is an asset and there is an increase in the value of asset

Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd

2nd Edition

ISBN: 9781337912259

Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher: Cengage Learning

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Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd

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Ch. 6 - Prob. 11GI Ch. 6 - What method of bad debt estimation categorizes...Ch. 6 - Why does the write-off of uncollectible accounts...Ch. 6 - Discuss the difference between a secured borrowing...Ch. 6 - When does a company record the transfer of...Ch. 6 - Prob. 16GI Ch. 6 - What is a non-interest-bearing note? How does...Ch. 6 - Prob. 18GI Ch. 6 - How are the cash proceeds determined when a note...Ch. 6 - Under IFRS, what criteria must be satisfied in...Ch. 6 - Prob. 21GI Ch. 6 - (Appendix 6. 1) What is the purpose of a petty...Ch. 6 - (Appendix 6. 7) Why are actual expenses, rather...Ch. 6 - Prob. 24GI Ch. 6 - Prob. 25GI Ch. 6 - Prob. 1MC Ch. 6 - Prob. 2MC Ch. 6 - A company is in its first year of operations and...Ch. 6 - Prob. 4MC Ch. 6 - Prob. 5MC Ch. 6 - Prob. 6MC Ch. 6 - A method of estimating bad debts that focuses on...Ch. 6 - When the accounts receivable of a company are sold...Ch. 6 - Prob. 9MC Ch. 6 - Prob. 10MC Ch. 6 - Prob. 11MC Ch. 6 - On December 31, Harrison Company reports the...Ch. 6 - Lindley Enterprises sells hand woven rugs. Paige...Ch. 6 - Long Corporation is a fabric manufacturing...Ch. 6 - Prob. 4RE Ch. 6 - Prob. 5RE Ch. 6 - Prob. 6RE Ch. 6 - Prob. 7RE Ch. 6 - On December 1 of the current year, Jordan Inc....Ch. 6 - On December 1 of the current year, Jordan Inc....Ch. 6 - On December 1, Newton Enterprises sells 100,000 of...Ch. 6 - Kaseys Cake Shop made 20,000 in sales of wedding...Ch. 6 - On June 1, Phillips Corporation sold, with...Ch. 6 - Prob. 13RE Ch. 6 - Prob. 1E Ch. 6 - Prob. 2E Ch. 6 - Journal Entry to Separate Receivables An...Ch. 6 - Prob. 4E Ch. 6 - Prob. 5E Ch. 6 - Prob. 6E Ch. 6 - Prob. 7E Ch. 6 - Prob. 8E Ch. 6 - Prob. 9E Ch. 6 - Aging Analysis of Accounts Receivable Cowens, a...Ch. 6 - Bradford Companys accounting records on December...Ch. 6 - Prob. 12E Ch. 6 - Prob. 13E Ch. 6 - Prob. 14E Ch. 6 - Transfer of Accounts Receivable Inder Corporation...Ch. 6 - Prob. 16E Ch. 6 - Prob. 17E Ch. 6 - Computing the Proceeds from the Sale of Notes...Ch. 6 - Recording the Sale of Notes Receivable Singer...Ch. 6 - Prob. 20E Ch. 6 - Prob. 21E Ch. 6 - Prob. 22E Ch. 6 - Prob. 23E Ch. 6 - Prob. 24E Ch. 6 - Prob. 1P Ch. 6 - Prob. 2P Ch. 6 - Prob. 3P Ch. 6 - Prob. 4P Ch. 6 - From inception of operations to December 31, 2015,...Ch. 6 - Prob. 6P Ch. 6 - Prob. 7P Ch. 6 - Prob. 8P Ch. 6 - Prob. 9P Ch. 6 - Prob. 10P Ch. 6 - Factoring and Assignment of Accounts Receivable...Ch. 6 - Recording Note Transactions The following...Ch. 6 - Notes Receivable Transactions The following notes...Ch. 6 - Prob. 14P Ch. 6 - Prob. 15P Ch. 6 - Prob. 16P Ch. 6 - Prob. 17P Ch. 6 - Prob. 18P Ch. 6 - Prob. 19P Ch. 6 - Prob. 1C Ch. 6 - Prob. 2C Ch. 6 - Bad Debt Expense When a company has a policy of...Ch. 6 - Prob. 4C Ch. 6 - Prob. 5C Ch. 6 - Components of Cash Cash is an important asset of a...Ch. 6 - Prob. 7C Ch. 6 - Transfer of Accounts and Notes Receivable Tidal...Ch. 6 - Prob. 9C Ch. 6 - Prob. 10C Ch. 6 - Researching GAAP Situation Hamilton Company...

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Prepare journal entry to record the given transactions.

Solution Summary: The author explains that the amount of money to be received by a company for the sale of goods and services to the customers is referred to as account receivable.

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