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. Allowance method: It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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. Two methods to estimate uncollectible accounts under allowance method are: 1. Percentage of sales method, and 2. Analysis of receivables method. Analysis of receivables method: A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts. Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance. The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

Question

Beginning inventory, purchases, and sales for an inventory item are as follows: Date Line Item Description Units and Cost Sep. 1 Beginning Inventory 23 units @ $15 5 Sale 13 units 17 Purchase 25 units @ $17 30 Sale 17 units Assuming a perpetual inventory system and the last-in, first-out method: Determine the cost of goods sold for the September 30 sale.$ Determine the inventory on September 30. $

Answer 1

Question

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

(c)

To determine

Net realizable value of the accounts receivable.

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Beginning inventory, purchases, and sales for an inventory item are as follows: Date Line Item Description Units and Cost Sep. 1 Beginning Inventory 23 units @ $15 5 Sale 13 units 17 Purchase 25 units @ $17 30 Sale 17 units Assuming a perpetual inventory system and the last-in, first-out method: Determine the cost of goods sold for the September 30 sale.$ Determine the inventory on September 30. $

Line Item Description Units and Cost Beginning inventory 12 units at $48 First purchase 15 units at $53 Second purchase 55 units at $56 Third purchase 13 units at $61 The firm uses the periodic inventory system, and there are 25 units of the commodity on hand at the end of the year. What is the ending inventory balance of Commodity Z using LIFO? a. $1,465 b. $1,265 c. $5,244 d. $1,200

Company sells blankets for $40 each. The following information was taken from the inventory records during May. The company had no beginning inventory on May 1. Company uses a perpetual inventory system. Date Blankets Units Cost May 3 Purchase 11 $20 10 Sale 4 17 Purchase 10 $17 20 Sale 6 23 Sale 3 30 Purchase 8 $24 Determine the May 31 inventory balance using the FIFO inventory costing method. a. $328 b. $272 c. $320 d. $384

Answer 2

Question

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

(c)

To determine

Net realizable value of the accounts receivable.

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Answer 3

Question

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

(c)

To determine

Net realizable value of the accounts receivable.

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Answer 4

Question

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

(c)

To determine

Net realizable value of the accounts receivable.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

(c)

To determine

Net realizable value of the accounts receivable.

Answer 6

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

Answer 7

Chapter 8, Problem 8.4BPE

(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.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of 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.

Two methods to estimate uncollectible accounts under allowance method are:

1. Percentage of sales method, and

2. Analysis of receivables method.

Analysis of receivables method:

A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated bad debts would be treated as the desired adjusted balance for allowance for doubtful accounts.

Allowance for doubtful account is a contra asset account, whose normal balance is a credit balance.

The amount of the adjusting entry for uncollectible accounts, under analysis of receivables method.

Answer 8

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

Answer 9

(b)

To determine

The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

Answer 10

(c)

To determine

Net realizable value of the accounts receivable.

Answer 11

(c)

To determine

Net realizable value of the accounts receivable.

Answer 12

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Answer 23

Ch. 8 - What are the three classifications of receivables?Ch. 8 - Dans Hardware is a small hardware store in the...Ch. 8 - What kind of an account (asset, liability, etc.)...Ch. 8 - After the accounts are adjusted and closed at the...Ch. 8 - A firm has consistently adjusted its allowance...Ch. 8 - Which of the two methods of estimating...Ch. 8 - Neptune Company issued a note receivable to...Ch. 8 - Prob. 8DQ Ch. 8 - The maker of a 240,000, 6%, 90-day note receivable...Ch. 8 - The note receivable dishonored in Discussion...

Solution Summary: The author explains how to determine the amount of the adjusting entry for uncollectible accounts under the analysis of receivables method.

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The adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense.

Net realizable value of the accounts receivable.

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