Accounts Receivable
Bal. 32,500
32,500
3,600
Write-off 2,400
Bal.
Sale
Bal. 34,900
Collection 1,200
Allowance for Uncollectible Accounts
E7A. Write-off of Accounts Receivable
*Rounded
9-10
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=
Maturity date:
Maturity date:
May 16
March 1
Principal Interest Maturity Value
Interest*
+
Interest Maturity Value
Rate of
Interest ×Time =
E9A. Notes Receivable Calculations
Principal
Interest*Principal
×
×× Time
Rate of
Interest =
Principal
×Time
E10A. Notes Receivable Calculations
Principal =Interest*
=+
Rate of
Interest ×
Interest in 2014: $295.89
Interest in 2013: $147.95
*Rounded
*Rounded
Maturity value: $15,443.84
9-11
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
a.
=
Principal Interest Maturity Value
=
×
Principal
$1,529.59
Interest*
×
+
Principal Time
Maturity value:
Rate of
Interest ×Time =
E11A. Notes Receivable Calculations
Maturity date: March 6
January 5, accepted a 60-day, 10% note for $2,400
Interest*
×
Rate of
Interest
*Rounded
9-12
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1.
2.
3.
5.
6.
7.
8.4
b
d
times
c
b (also could be a)
a
b
E12A. Management Issues
=
Receivables Turnover
*Rounded
Note to Instructor: Solutions for Exercises: Set B are provided separately on the
Days’ Sales Uncollected
9-13
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1.
Accounts Receivable
$281,800
P1. Methods of Estimating Uncollectible Accounts and Receivables Analysis
=
Problems
9-14
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( * + **) / 2
4.
now existing that may not be collected. This is a balance sheet approach.
estimate uncollectible accounts is to consider a portion of every sales dollar to be an
amount that will not be collected. This is known as an income statement approach.
Because the percentage of net sales method and the accounts receivable aging method
Underlying the accounts receivable aging method is the assumption that the best way
to estimate uncollectible accounts is to consider the portion of the accounts receivable
balance.
Underlying the percentage of net sales method is the assumption that the best way to
365
*$305,800 – $24,000 = $281,800
3.4
$303,300$281,800
**$320,000 – $16,700 = $303,300
$292,550 =
Days’ Sales Uncollected = =
P1. Methods of Estimating Uncollectible Accounts and Receivables Analysis (Concluded)
Receivables Turnover =
days
***Rounded
107 days***
9-15
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1.
1–30 31–60 61–90 Over
Not Yet Days Days Days 90 Days
Total Due Past Due Past Due Past Due Past Due
2.
P2. Accounts Receivable Aging Method
Accounts Receivable
Balance
Customer
Techno Designs Store
Aging Analysis of Accounts Receivable
January 31, 2015
Account
9-16
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3.
Percentage Allowance for
Considered Uncollectible
Amount Uncollectible Accounts*
5.
Estimates play an important role in applying the aging analysis method. Businesses
January 31, 2015
Techno Designs Store
Estimated Uncollectible Accounts
P2. Accounts Receivable Aging Method (Concluded)
9-17
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August 1
Maturity Value
May 16, accepted $64,000, 60-day, 13% note receivable
+
Maturity value: $123,550.68
Maturity date:
P3. Notes Receivable Calculations
Maturity date:
=
Principal Interest
Maturity Value
*Rounded
Interest
July 15
=
+
Principal
9-18
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.