4. The accounts receivable and allowance for doubtful accounts may be reported at a net
5. (1) The percentage rate used is excessive in relationship to the accounts written off as
8. The interest will amount to $5,100 ($85,000 ×6%) only if the note is payable one year from
9. Debit Accounts Receivable for $243,600
10. Cash 245,427
CHAPTER 9
RECEIVABLES
DISCUSSION QUESTIONS
9-1
CHAPTER 9 Receivables
PE 9–1A
Feb. 12 Cash 800
PE 9–1B
Oct. 2 Cash 600
PE 9–2A
Feb. 12 Cash 800
PRACTICE EXERCISES
PE 9–2B
Oct. 2 Cash 600
PE 9–3A
a. $55,500 ($7,400,000 × 0.0075)
b.
Accounts Receivable…………………………………………………
…
PE 9–3B
b.
…
Adjusted Balance
Adjusted Balance
$685,000
9-3
CHAPTER 9 Receivables
PE 9–4A
PE 9–4B
PE 9–5A
a. The due date for the note is September 6, determined as follows:
c.
Sept. 6 Cash 210,875
CHAPTER 9 Receivables
PE 9–5B
a. The due date for the note is August 7, determined as follows:
April…………………………………………………………………… 21 days (30 – 9)
PE 9–6A
a.
Net sales……………………………
…
Accounts receivable:
b.
Net sales……………………………
…
Accounts Receivable Turnover 2014 2013
$2,912,000 $2,958,000
Number of Days’ Sales
in Receivables 2014 2013
$2,912,000 $2,958,000
9-5
CHAPTER 9 Receivables
PE 9–6B
a.
Net sales………………………………
…
Accounts receivable:
b.
Net sales………………………………
…
c. The increase in the accounts receivable turnover from 11.8 to 13.4 and the
Number of Days’ Sales
in Receivables 2014 2013
$7,906,000 $6,726,000
Accounts Receivable Turnover 2014 2013
$7,906,000 $6,726,000
9-6
CHAPTER 9 Receivables
Ex. 9–1
Accounts receivable from the U.S. government are significantly different from
Ex. 9–2
a. MGM Resorts International: 22.6% ($93,760,000 ÷ $415,654,000)
Ex. 9–3
Jan. 30 Accounts Receivable—Dr. Cindy Mott 85,000
Sales 85,000
EXERCISES
9-7
CHAPTER 9 Receivables
Ex. 9–4
Mar. 19 Accounts Receivable—Midnight Delights Co. 37,500
Sales 37,500
Ex. 9–5
a. Bad Debt Expense 11,750
Ex. 9–6
9-8
CHAPTER 9 Receivables
Ex. 9–8
a.
Customer
Color World Industries
b.
Not Past Over
Customer Balance Due 1–30 31–60 61–90 90
Allied Industries Inc. 3,000 3,000
Zussman Company 5,000 5,000
Subtotals 750,000 480,000 160,000 75,000 28,000 7,000
Ex. 9–9
Not Past Over
Balance Due 1–30 31–60 61–90 90
Days Past Due
Days Past Due
Due Date
March 13
Number of Days Past Due
171 days (18 + 30 + 31 + 30 + 31 + 31)
Aging of Receivables Schedule
August 31
9-9
CHAPTER 9 Receivables
Ex. 9–10
Ex. 9–11
Balance Percent Amount
Not past due $ 740,000 0.5% $ 3,700
Ex. 9–12
2014
Dec. 31 Bad Debt Expense 47,635
Estimated
Age Interval
Uncollectible Accounts
9-10
CHAPTER 9 Receivables
Ex. 9–13
a. Apr. 13 Bad Debt Expense 8,450
Accounts Receivable—Dean Sheppard 8,450
9-11
CHAPTER 9 Receivables
Ex. 9–13 (Concluded)
b. Apr. 13 Allowance for Doubtful Accounts 8,450
Accounts Receivable—Dean Sheppard 8,450
May 15 Cash 500
c. Bad debt expense under:
9-12
CHAPTER 9 Receivables
Ex. 9–14
a. June 8 Bad Debt Expense 8,440
Accounts Receivable—Kathy Quantel 8,440
9-13
CHAPTER 9 Receivables
Ex. 9–14 (Continued)
b. June 8 Allowance for Doubtful Accounts 8,440
Accounts Receivable—Kathy Quantel 8,440
Aug. 14 Cash 3,000
Allowance for Doubtful Accounts 9,500
Computations:
Percent Amount
0–30 days 1% $ 3,200
$320,000
Past Due)
Accounts
Estimated DoubtfulReceivables
Balance on
Aging Class
(Number of Days
December 31
9-14
CHAPTER 9 Receivables
Ex. 9–14 (Concluded)
c. Bad debt expense under:
Allowance method………………………………………………………………
…
$45,545
than under the allowance method.
Ex. 9–15
Ex. 9–16
Ex. 9–17
a. Bad Debt Expense 30,000
Accounts Receivable—Shawn Brooke 4,650
Accounts Receivable—Eve Denton 5,180
Accounts Receivable—Art Malloy 11,050
9-15
CHAPTER 9 Receivables
Ex. 9–18
a. Bad Debt Expense 102,500
Accounts Receivable—Kim Abel 21,550
b. Allowance for Doubtful Accounts 102,500
Accounts Receivable—Kim Abel 21,550
Computations:
Percent Amount
31–60 days 2% 6,200
91–120 days 30% 22,800
Unadjusted debit balance of Allowance for Doubtful Accounts
Past Due)
Accounts
Estimated DoubtfulAging Class
(Number of Days
Receivables
Balance on
December 31
310,000
76,000
9-16
CHAPTER 9 Receivables
Ex. 9–19
Interest
Ex. 9–20
Ex. 9–21
1. Sale on account.
Due Date
9-17
CHAPTER 9 Receivables
Ex. 9–22
2013
Dec. 16 Notes Receivable 21,000
Ex. 9–23
July 12 Notes Receivable 240,000
9-18
CHAPTER 9 Receivables
Ex. 9–24
Apr. 18 Notes Receivable 60,000
Accounts Receivable—Glenn Cross 60,000
Ex. 9–25
1. The interest receivable should be reported separately as a current asset. It
A corrected partial balance sheet would be as follows:
Current assets:
Cash $ 78,500
NAPA VINO COMPANY
Balance Sheet
December 31, 2014
Assets
9-19
CHAPTER 9 Receivables
Ex. 9–26
a. and b.
Net sales……………………………
c. The accounts receivable turnover indicates an increase in the efficiency of collecting
Ex. 9–27
a. and b.
Net sales……………………………
c. The accounts receivable turnover indicates a decrease in the efficiency of collecting
Year 2 Year 1
$5,660,300 $4,978,900
Year 2 Year 1
$10,706,588 $10,494,983
9-20