Accounts receivable Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business. To determine: The amount of cash collection during the period.

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Answer 1

Question

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

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Presented below is information for Ayayai Company. 1. Beginning-of-the-year Accounts Receivable balance was $23,100. 2. Net sales (all on account) for the year were $104,700. Ayayai does not offer cash discounts. 3. Collections on accounts receivable during the year were $85,400. Ayayai is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,900 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,075. Compute Ayayai’s accounts receivable turnover for the year, assuming the receivables are sold. (Round answers to 2 decimal places, e.g. 4.57.) Accounts receivable turnover ______________ times Days to collect accounts receivable ______________ days

Presented below is information for Ayayai Company. 1. Beginning-of-the-year Accounts Receivable balance was $23,100. 2. Net sales (all on account) for the year were $104,700. Ayayai does not offer cash discounts. 3. Collections on accounts receivable during the year were $85,400. Ayayai is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,900 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,075. Prepare the journal entry to record the sale of the receivables. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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Answer 2

Question

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

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Answer 3

Question

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

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Answer 4

Question

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

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Answer 5

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

Answer 6

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

Answer 7

Chapter 8, Problem 8.17E

(a)

To determine

Accounts receivable

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

To determine: The amount of cash collection during the period.

Answer 8

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

Answer 9

(b)

To determine

To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

Answer 10

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

Answer 11

(c)

To determine

To discuss: The accounting implications regarding Incorporation B’s decision.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8 - What is the difference between an account...Ch. 8 - What are some common types of receivables other...Ch. 8 - What are the essential features of the allowance...Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - Prob. 6Q Ch. 8 - Prob. 7Q Ch. 8 - Tawnya Dobbs, the vice president of sales for...Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

Solution Summary: The author analyzes how Corporation B's decision would affect its quality of earnings ratio. If it reduces the requirements for credit sales, it should increase its allowance for doubtful accounts, and estimated bad debt expense.

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To discuss: How Corporation B’s decision would affect its quality of earnings ratio.

To discuss: The accounting implications regarding Incorporation B’s decision.

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