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Title: Ethics Challenge
Title: Question 1
QA_Ori: If the estimate for bad debts is reduced then less Bad Debts
Title: Question 2
QA_Ori: Accounting procedures often allow for alternate methods or require
the use of estimates. Therefore, managers have some leeway in their
Title: Question 2
QA_Ori: An informed owner or an effective board of directors will be aware of
alternate accounting methods and how estimates can affect the financial
Title: Communicating in Practice
TO: Sid Omar
FROM: (Your Name)
DATE: _______________
SUBJECT: Difference Between Bad Debts Expense and Allowance
For Doubtful Accounts
In accounting for credit sales and bad debts, we report sales revenue in the
Determining Bad Debts Expense
Determining Allowance For Doubtful Accounts
The Allowance for Doubtful Accounts unadjusted balance at the end of the year is
Sid, I hope this clarifies the matter for you. If you have further questions, please
call me.
Title: Taking It to the Net
QA_Ori:
1. At December 31, 2011, eBay’s ($ thousands) net accounts receivable were
2.
$ thousands
December 31,
2011
December 31,
2010
Gross accounts receivable...........................$768,794 $540,851
3. These percentages seem high compared to other companies, but eBay’s
Title: Teamwork in Action
QA_Ori:
Instructor note: Computations for the aging schedule are in the Problem 9-4A solution. The
check figure for total estimated uncollectibles is $41,650.
Adjusting entry
December 31, 2013, Balance Sheet Presentation
* Total of each age category.
** Net Realizable Accounts Receivable.
Title: Entrepreneurial Decision
QA_Ori:
1. Computation of added annual net income or loss
a.
Added Monthly Net Income or Loss under Plan A
Increased sales................................................................. $250,000
Cost of sales...................................................................... (135,500)
b.
Added Monthly Net Income or Loss under Plan B
Increased sales................................................................. $500,000
Cost of sales...................................................................... (375,000)
2.
Plan (A) provides a slightly higher income, so if the company can only
Plan (A) might expand its product into new markets, and could increase
sales over time. However, this is a new distribution method for the
Taking credit cards for these online sales reduces its risk of uncollectible
The company does run some unknown risk associated with having new
Title: Hitting the Road
QA_Ori:
Telephone calls to VISA and American Express are the source of
Some merchants often choose not to accept certain cards because the
credit card fees are higher than others. In the case of VISA, compared to
Title: Global Decision
QA_Ori:
1. Accounts Receivable Turnover (Euro in thousands)
2. Average Collection Period (or “Average Days’ Sales Uncollected”)
3. Piaggio is in between Polaris and Arctic Cat in terms of its turnover and collection
