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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Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

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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