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. Bad debt expense: Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense. Allowance method: It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account. Write-off: Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible. To record: The journal entries for the given transactions.

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Answer 1

Question

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

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Pettis needs to determine its year-end inventory. The warehouse contains 27,000 units, of which 3,700 were damaged by flood and cannot be sold. Another 2,700 units were purchased and shipped to FOB destination, and are in transit. The company also consigns goods and has 4,700 units at a consignee's location. How many units should Pettis include in its year-end inventory? A. 34,400 B. 25,300 C. 30,700 D. 38,100 E. 28,000

Answer 2

Question

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

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Answer 3

Question

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

Answer 6

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

Answer 7

Chapter 8, Problem 8.2AP

(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.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of a particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for doubtful account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

To record: The journal entries for the given transactions.

Answer 8

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

Answer 9

(b)

To determine

the balance in allowance for doubtful accounts and accounts receivable using T-account.

Answer 10

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

Answer 11

(c)

To determine

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

Answer 12

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

Answer 13

(d)

To determine

To compute: The accounts receivable turnover and average collection period.

Answer 14

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Answer 15

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Answer 17

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the balance in allowance for doubtful accounts and accounts receivable using T-account.

To prepare: The adjusting entry for recording the bad debt expenses for 2014, using the estimated bad debt of $46,000.

To compute: The accounts receivable turnover and average collection period.

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