DOC PREVIEW
UA ACCT 200 - Chapter 5 Reviews and Examples

This preview shows page 1-2 out of 5 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 5 pages.
Access to all documents
Download any document
Ad free experience
View full document
Premium Document
Do you want full access? Go Premium and unlock all 5 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 5 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

ACCT 200 1st Edition Lecture 12Outline of Last Lecture I. ReceivablesII. E 5-1III. DiscountsIV. E 5-3V. E 5-4VI. E 5-6VII. Allowance for Uncollectible AccountsVIII. BE 5-4IX. BE 5-5X. Review and ExamplesOutline of Current Lecture I. Review/ExamplesII. E 5-15III. E 5-17IV. E 5-18V. Important NotesCurrent LectureReview:SalesSale on acct, 1000 sale terms 2/10 net 30Dr Acct receivable 1000Cr Revenue 1000Sales return 100Dr Sales returns/allowance 100Cr Acct receivable 100Customer pays and takes discount (1000-100=900*.02=18 discount if paid in 10 days)Dr Cash 882Dr Sales discount 18Cr Acct receivable 900If no discount:Dr Cash 900Cr Acct receivable 900Allowance method: to help estimate uncollectable accountsMatching bad debt expense is recorded in same year as revenuesAllow for uncollectable accounts: list w/assets but subtract it (contra asset); credit balanceAcct receivable 80,000 drBegin allow. balance 500 cr5% is uncollectableEnd allow balance needed: acct receivable x % uncollectable=80,000*.05=4000Bad debt expense 3500Allow for uncoll accts 3500Acct receivable “real or collectable” value=80,000 – 4000 (end)=76,000H Jones company goes bankrupt so $1000 they owe will never get paid“write off the account” – removes acct receivable and reduces allowance for uncollectable acctAllow for uncollectable acct 1000Acct receivable 1000Write off #2 for 3700Allow for uncollectable acct 3700Acct receivable 370090,000 in acct receivable5% uncollectable90,000*.05=4500 in allow acct as end balanceBad debt expense 5200Allow for uncollectable acct 5200Affects acct equation: assets and equity decrease E 5-1510,000 note receivable10% interest rate on noteIssued March 15, 2013 Due Sept 1(6 month note)March 1 Notes receivable 10,000Legal service revenue 10,00010,000*.10*(6/12)=500 interestSept 1 Cash 10,500Notes receivable 10,000Interest revenue 500E 5-174/1/12 500,000 note receivable (12-month note receivable), 12% interest rateCalculations:500,000*.12=60,000 total interest60,000*(9/12)=45,000 2012 revenue60,000*(3/12)=15,000 2013 revenue12/31/12 adjusting entry (9 months)Interest receivable 45,000Interest revenue 45,0004/1/13Cash 560,000Note receivable 500,000Interest receivable 45,000Interest revenue 15,000E 5-18Walmart – begin acct receivable 1715; end acct receivable 2662; net credit sales 312,427Find receivables turnover ratioStep 1 – average – (1715+2662)/2=2188.5Step 2 – calculate turnover – net credit sales/average acct receivable – (312,427/2188.5=142.759 times)Step 3 – average collection period – 365/turnover – (365/142.759=2.6 days)Important notes:Interest rates are always annual for this class; don’t forget to adjust calculations for interest based on how many months are includedKnow accrued interest (slides 5-38, 5-39) for


View Full Document

UA ACCT 200 - Chapter 5 Reviews and Examples

Download Chapter 5 Reviews and Examples
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Chapter 5 Reviews and Examples and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Chapter 5 Reviews and Examples 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?