INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 7, Problem 7.5BYP
Ethics Case 7–5
Uncollectible accounts
• LO7–5
You have recently been hired as the assistant controller for Stanton Industries, a large, publicly held manufacturing company. Your immediate superior is the controller who, in turn, is responsible to the vice president of finance.
The controller has assigned you the task of preparing the year-end
After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new aging category. This will change the required allowance for uncollectible accounts from $180,000 to $135,000. Tactfully, you ask the controller for an explanation for the change and he tells you “We need the extra income; the bottom line is too low.”
Required:
1. What is the effect on income before taxes of the change requested by the controller?
2. Discuss the ethical dilemma you face. Consider your options and responsibilities along with the possible consequences of any action you might take.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
chap 8 q4 fill out part b chart
432
SECTION I
13
JUMP
START
WWW
REVIEW EXERCISES
Calculate the missing information on the following revolving credit accounts. Interest is
calculated on the unpaid or previous month's balance.
Previous
Balance
1. $167.88
2. $35.00
3. $605.42
4. $2,390.00
5. $3,418.50
6. $1,028.61
Annual
Percentage
Rate (APR)
18%
12%
||
9%
Monthly
Periodic
Rate
1.5%
.75%
1-%
4
CHAPTER 13- CONSUMER AND BUSINESS CREDIT
1%
Finance
Charge
$2.52
||||
Purchases
and Cash
Advances
$215.50
$186.40
$156.12
$1,233.38
$329.00
$322.20
Payments
and
Credits
$50.00
$75.00
$200.00
$300.00
$1,200.00
$300.00
New
Balance
$335.90
SECTION 1 OPEN-E
13. Calculate the
vious month's
9951020731
14. Calculate
month's
EX 9-5 Entries to write off accounts receivable
OBJ. 3, 4
Creative Solutions Company, a computer consulting firm, has decided to write off the
$11,750 balance of an account owed by a customer, Wil Treadwell. Journalize the entry
to record the write-off, assuming that (a) the direct write-off method is used and (b) the
allowance method is used.
ORL
Chapter 7 Solutions
INTERMEDIATE ACCOUNTING (LL) W/CONNECT
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...Ch. 7 - Briefly explain the difference between the income...
Ch. 7 - Prob. 7.11QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.14QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Explain how the CECL model (introduced in ASU No....Ch. 7 - Prob. 7.18QCh. 7 - Prob. 7.19QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.21QCh. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Cash discounts; gross method LO73 On December 28,...Ch. 7 - Prob. 7.5BECh. 7 - Sales re turns LO74 During 2018, its first year...Ch. 7 - Sales re turns LO74 Refer to the situation...Ch. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.12BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.15BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.17BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.20BECh. 7 - Prob. 7.21BECh. 7 - Impairments of Accounts Receivable Appendix 7B...Ch. 7 - Credit Losses on Accounts Receivable (CECL Model) ...Ch. 7 - Prob. 7.1ECh. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Trade and cash discounts; the gross method and the...Ch. 7 - Prob. 7.6ECh. 7 - Cash discounts; the net method LO73 [This is a...Ch. 7 - Sales returns LO74 Halifax Manufacturing allows...Ch. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Uncollectible accounts; allowance method; balance...Ch. 7 - Uncollectible accounts; allowance method and...Ch. 7 - Uncollectible accounts; allowance method; solving...Ch. 7 - Note receivable LO77 On June 30, 2018, the...Ch. 7 - Noninterest-bearing note receivable LO77 [This is...Ch. 7 - Long-term notes receivable LO77 On January 1,...Ch. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Discounting a note receivable LO78 Selkirk...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Receivables; transaction analysis LO73, LO75...Ch. 7 - Prob. 7.25ECh. 7 - Prob. 7.26ECh. 7 - Prob. 7.27ECh. 7 - Prob. 7.28ECh. 7 - Prob. 7.29ECh. 7 - Prob. 7.30ECh. 7 - Impairments of Notes Receivable Appendix 7B At...Ch. 7 - Prob. 7.32ECh. 7 - Prob. 7.33ECh. 7 - Prob. 7.34ECh. 7 - Uncollectible accounts; allowance method; income...Ch. 7 - Uncollectible accounts; Amdahl LO75 Real World...Ch. 7 - Bad debts; Nike, Inc. LO75 Real World Financials...Ch. 7 - Uncollectible accounts LO75, LO76 Raintree...Ch. 7 - Prob. 7.5PCh. 7 - Notes receivable; solving for unknowns LO77...Ch. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10PCh. 7 - Prob. 7.11PCh. 7 - Accounts and notes receivable; discounting a note...Ch. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15PCh. 7 - Prob. 7.16PCh. 7 - Prob. 7.17PCh. 7 - Prob. 7.1BYPCh. 7 - Prob. 7.2BYPCh. 7 - Prob. 7.3BYPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.6BYPCh. 7 - Prob. 7.7BYPCh. 7 - Prob. 7.8BYPCh. 7 - Prob. 7.9BYPCh. 7 - Prob. 7.10BYPCh. 7 - Prob. 7.11BYPCh. 7 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 11. urgent need the answer of this questionarrow_forwardRequired information Problem 8-4A Preparing a bank reconciliation and recording adjustments LO P3 Skip to question [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31. On July 31, the company’s Cash account has a $25,100 debit balance, but its July bank statement shows a $27,683 cash balance. Check No. 3031 for $1,600, Check No. 3065 for $576, and Check No. 3069 for $2,368 are outstanding checks as of July 31. Check No. 3056 for July rent expense was correctly written and drawn for $1,250 but was erroneously entered in the accounting records as $1,240. The July bank statement shows the bank collected $9,500 cash on a note for Branch. Branch had not recorded this event before receiving the statement. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet…arrow_forwardRequired information Problem 8-4A Preparing a bank reconciliation and recording adjustments LO P3 Skip to question [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31. On July 31, the company’s Cash account has a $25,100 debit balance, but its July bank statement shows a $27,683 cash balance. Check No. 3031 for $1,600, Check No. 3065 for $576, and Check No. 3069 for $2,368 are outstanding checks as of July 31. Check No. 3056 for July rent expense was correctly written and drawn for $1,250 but was erroneously entered in the accounting records as $1,240. The July bank statement shows the bank collected $9,500 cash on a note for Branch. Branch had not recorded this event before receiving the statement. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet…arrow_forward
- Required information Problem 8-4A Preparing a bank reconciliation and recording adjustments LO P3 [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31. a. On July 31, the company's Cash account has a $25,677 debit balance, but its July bank statement shows a $27,364 cash balance. b. Check No. 3031 for $1,240, Check No. 3065 for $396, and Check No. 3069 for $2,008 are outstanding checks as of July 31. c. Check No. 3056 for July rent expense was correctly written and drawn for $1,280 but was erroneously entered in the accounting records as $1,270. d. The July bank statement shows the bank collected $6,500 cash on a note for Branch. Branch had not recorded this event before receiving the statement. e. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this…arrow_forwardRequired information Problem 8-4A Preparing a bank reconciliation and recording adjustments LO P3 Skip to question [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31. On July 31, the company’s Cash account has a $25,239 debit balance, but its July bank statement shows a $26,547 cash balance. Check No. 3031 for $1,090, Check No. 3065 for $321, and Check No. 3069 for $1,858 are outstanding checks as of July 31. Check No. 3056 for July rent expense was correctly written and drawn for $1,250 but was erroneously entered in the accounting records as $1,240. The July bank statement shows the bank collected $9,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet…arrow_forwardRequired information Problem 8-4A Preparing a bank reconciliation and recording adjustments LO P3 Skip to question [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31. On July 31, the company’s Cash account has a $25,373 debit balance, but its July bank statement shows a $27,906 cash balance. Check No. 3031 for $1,580, Check No. 3065 for $566, and Check No. 3069 for $2,348 are outstanding checks as of July 31. Check No. 3056 for July rent expense was correctly written and drawn for $1,280 but was erroneously entered in the accounting records as $1,270. The July bank statement shows the bank collected $9,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet…arrow_forward
- Sh6 Please help me Solution Thankyouarrow_forwardExercise 7 - 6A (Static) Effect of recovering a receivable previously written off LO 7 - 1 Renue Spa had the following balances at December 31, Year 2: Cash of $15,000, Accounts Receivable of $61,000, Allowance for Doubtful Accounts of $3,750, and Retained Earnings of $72, 250. During Year 3, the following events occurred: $2,100 of accounts receivable were written off as uncollectible. The company unexpectedly collected $500 of receivables that had been written off in a previous accounting period. Services provided on account during Year 3 were $215,000. Cash collections from receivables were $218,000. Uncollectible accounts expense was estimated to be 2 percent of the sales on account for the period. Required: Organize the transaction data in accounts under an accounting equation. Based on the preceding information, compute (after year-end adjustment): (1) Balance of Allowance for Doubtful Accounts at December 31, Year 3. (2) Balance of Accounts Receivable at December 31, Year 3. (3)…arrow_forwardQuestion 12 of 20 Which one of the following statements is NOT true? A. Details from the purchases journal are posted to the debtors ledger. B. Details from the sales journal are posted to the debtors ledger. C. When subsidiary journals for a month have been completed, the joumal columns are added up and the totals are posted to the general ledger. D. The combined totals of the individual accounts contained in the debtors ledger must balance with the balance of the debtors contral account in the general ledger.arrow_forward
- Vignette 6.1 ERRONEOUS RECORD KEEPING This is it, Max—either you get our account straightened out, or we're taking our business to Sudential" This as the fourth customer in one week that had threatened Max. The large health insurance company Max worked for received hundreds of checks each day from its customers in payment of insurance premiums. Because of the routine nature of the job of keying in payments, the cash data entry clerk often got bored. His mind would wander to more scintillating topics. In the middle of the afternoon, the clerk had to really struggle just to stay awake. As a result, the clerk made many errors in entering the payments. He would transpose numbers and key in the customer codes incorrectly, causing credits to go into the wrong customer accounts. Max and other sales reps complained to top management about the mistakes in their customers' accounts. As a result, "management brought in two employees from other departments to review the customer accounts and…arrow_forwardVignette 6.1 ERRONEOUS RECORD KEEPING This is it, Max-either you get our account straightened out, or we're taking our business to Sudential" This as the fourth customer in one week that had threatened Max. The large health insurance company Max worked for received hundreds of checks each day from its customers in payment of insurance premiums. Because of the routine nature of the job of keying in payments, the cash data entry clerk often got bored. His mind would wander to more scintillating topics. In the middle of the afternoon, the clerk had to really struggle just to stay awake. As a result, the clerk made many errors in entering the payments. He would transpose numbers and key in the customer codes incorrectly, causing credits to go into the wrong customer accounts. Max and other sales reps complained to top management about the mistakes in their customers' accounts. As a result, "management brought in two employees from other departments to review the customer accounts and…arrow_forward4arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Corporate Financial AccountingAccountingISBN:9781337398169Author:Carl Warren, Jeff JonesPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Accounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage Learning
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781337398169
Author:Carl Warren, Jeff Jones
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounting Information Systems
Finance
ISBN:9781337552127
Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill
Publisher:Cengage Learning
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License