# CHAPTER 6 THE CURRENT ASSET CLASSIFICATION, CASH, AND ACCOUNTS RECEIVABLE

Save this PDF as:

Size: px
Start display at page:

## Transcription

1 CHAPTER 6 THE CURRENT ASSET CLASSIFICATION, CASH, AND ACCOUNTS RECEIVABLE BRIEF EXERCISES BE6 1 a. Total Accounts Receivable = Net Receivables + Allowance for Uncollectibles 2009 Total Accounts Receivable = \$3,623 + \$ Total Accounts Receivable = \$3, Uncollectibles as a Percentage of Total Accounts Receivable = \$93/\$3,716 = 2.50% 2008 Total Accounts Receivable = \$4,618 + \$ Total Accounts Receivable = \$4, Uncollectibles as a Percentage of Total Accounts Receivable = \$90/\$4,708 = 1.91% Therefore, the percentage increased. b. Since Emerson Electric is using the percentage of accounts receivable method (balance sheet approach), bad debt expense for 2009 would be the amount needed to adjust the allowance for doubtful accounts to \$93. This number (bad debt expense) is impacted by the balance in the uncollectible account at the beginning of the year and the write-offs taken during the year by Emerson Electric. BE6 2 a. 2007: Ending Allowance Balance = Beginning Allowance Balance + Bad Debt Charge Write-Offs + Recoveries \$4,238 = \$3, ,431 \$5, ,828 Bad Debt Expense for 2007 = \$4, : Ending Allowance Balance = Beginning Allowance Balance + Bad Debt Charge Write-Offs + Recoveries \$5,325 = \$4, ,518 \$8, ,731 Bad Debt Expense for 2008 = \$7,518 As the economy went into recession in 2008, companies that extend credit (such as GE s capital division) had a more difficult time collecting receivables. b. 2007: \$5,966 write-offs; \$4,138 write-offs, net of recoveries

2 2008: \$8,162 write-offs; \$6,431 write-offs, net of recoveries c. The allowance account grew by 25.7% ((\$5,325- \$4,238)/\$4,238) from 2007 to The allowance account grew at such a large rate due to the deterioration of the economy and GE s belief that a greater amount future receivables will prove to be uncollectible as a result. By increasing the allowance balance the company is taking into consideration that receivables will not be as collectible as when the economy was healthier. Increasing the allowance lowers the net realizable value of the receivables on the balance sheet, which is prudent behavior given the economic climate. E6 4 5/1/12 Accounts Receivable (+A)... 30,000 Sales (R, +SE)... 30,000 Sold lobster on account. 5/5/12 Accounts Receivable (+A)... 20,000 Sales (R, +SE)... 20,000 Sold cod on account. 5/6/12 Cash (+A)... 29,100 Cash Discount (-R, -SE) Accounts Receivable (-A)... 30,000 Collected cash from customer. 5/31/12 Cash (+A)... 20,000 Accounts Receivable (-A)... 20,000 Collected cash from customer. E6 5 Allowance for Uncollectibles 2011 Write-Offs 10,000 12/31/11 Bad Debt Expense 30, Write-Offs 22,000 12/31/12 Bad Debt Expense 28, \$1,500, = \$30,000 2 \$1,400, = \$28,000 Ending Balance 26,000 Overall, the bad debts estimates are sufficient to cover the write-offs.

3 E6 6 a. Ending Allowance Balance = Beginning Allowance Balance + Bad Debt Charge Write-Offs + Recoveries \$200,000 = Beginning Allowance Balance + \$162,500 \$195,000 + \$45,000 Beginning Allowance Balance = \$187,500 * \$162,500 = Sales of \$3,250,000 Estimated uncollectible percentage of 5% b. [Assume the \$4,200,000 cash collections includes the \$45,000 recovery] Ending Accounts Receivable = Beginning Accounts Receivable + Credit Sales during the year Cash Collected on account receivables during the year Accounts Receivables written off + Written-Off Accounts Receivables Recovered. \$7,500,000 = X + \$3,250,000 \$4,200,000 \$195,000 + \$45,000 X = \$8,600,000 E6 7 a. Bad Debt Charge (E, SE)... 9 Allowance for Doubtful Accounts ( A)... 9 Recognized bad debt charge. b. Ending Allowance Balance = Beginning Allowance Balance + Bad Debt Charge Write-Offs + Recoveries = \$12 + \$9 \$11 + \$0 = \$10 E6 8 a. Ending Allowance Balance = Beginning Allowance Balance + Bad Debt Charge Write-Offs + Recoveries \$1,300 = \$1,000 + (Sales of \$75,300 x Estimated uncollectible percentage of 2%) Write-Offs + \$55 Write-Offs = \$1,261 b. Accounts Receivable (+A)... 75,300 Sales (R, +SE)... 75,300 Made sales on account. Accounts Receivable (+A) Allowance for Doubtful Accounts (-A) Recovered accounts previously written off. Allowance for Doubtful Accounts (+A)... 1,261 Accounts Receivable ( A)... 1,261 Wrote off accounts deemed uncollectible.

4 Bad Debt Expense (E, SE)... 1,506 Allowance for Doubtful Accounts ( A)... 1,506 Recognized bad debt expense. Cash (+A)... 73,894* Accounts Receivable ( A)... 73,894 Collected cash from customers. * \$73,894 was calculated as follows: Ending balance in Accounts Receivable of \$9,400 = Beginning balance in Accounts Receivable of \$9, Credit sales of \$75, Cash collections Recoveries of \$ Write-offs of \$1,261 E6 10 Total receivables equals the sum of the receivable balances for each age classification. Therefore, total receivables equals \$290,000 + \$110,000 + \$68,000 + \$40,000, or \$508,000. Expected bad debts equals the sum of the estimated uncollectible amounts for each age classification. As shown in the following table, the total expected bad debts associated with the \$508,000 currently in accounts receivable is \$22,740. Age Account Balance Noncollection Probability Uncollectible Amount Current \$290,000 2% \$ 5, days 110,000 5% 5, days 68,000 8% 5,440 >90 days 40,000 15% 6,000 Total \$508,000 \$ 22,740 P6 2 a. 3/3 Accounts Receivable (+A)... 1,400 Sales (R, +SE)... 1,400 Made sale on account. 3/8 Accounts Receivable (+A) Sales (R, +SE) Made sale on account. 3/11 Cash (+A)... 1,372 Cash Discount ( R, SE) Accounts Receivable ( A)... 1,400 Collected cash from customer. 3/28 Cash (+A) Accounts Receivable ( A) Collected cash from customer.

5 P6 2 Concluded 3/29 Accounts Receivable (+A)... 1,800 Sales (R, +SE)... 1,800 Made sale on account. b. The annual interest rate of forfeiting a cash discount is calculated as follows: Annual rate = Cash discount rate x (365 days Number of days receipt collected after the end of the discount period) = 2% x ( days) = 73% Since BBB can borrow money at an annual interest rate of 9%, BBB should have borrowed money at the 9% rate and paid its obligation to QNI Corporation. BBB would have saved itself some interest costs by borrowing the money rather than forfeiting the cash discount. P6 3 a Allowance for Doubtful Accounts (+A)... 6,000 Accounts Receivable ( A)... 6,000 Wrote off accounts deemed uncollectible. Bad Debt Charge (E, SE)... 5,400* Allowance for Doubtful Accounts ( A)... 5,400 Recognized bad debt charge. * \$5,400 = Credit sales of \$180,000 x Estimated uncollectible percentage of 3% 2011 Allowance for Doubtful Accounts (+A)... 10,000 Accounts Receivable ( A)... 10,000 Wrote off accounts deemed uncollectible. Bad Debt Charge (E, SE)... 6,000* Allowance for Doubtful Accounts ( A)... 6,000 Recognized bad debt charge. * \$6,000 = Credit sales of \$200,000 x Estimated uncollectible percentage of 3% 2012 Allowance for Doubtful Accounts (+A)... 11,000 Accounts Receivable ( A)... 11,000 Wrote off accounts deemed uncollectible. Bad Debt Expense (E, SE)... 6,150* Allowance for Doubtful Accounts ( A)... 6,150 Recognized bad debt charge. * \$6,150 = Credit sales of \$205,000 x Estimated uncollectible percentage of 3%

7 P6 5 a. Ending Allowance balance = Beginning Allowance balance + Bad Debt Charge + Recoveries Write-Offs 2010 Ending Allowance Balance = \$0 + \$4,200* + \$0 - \$3,000 = \$1,200 *2010 credit sales x Ending Allowance Balance = \$1,200 + \$7,600** + \$0 - \$6,000 = \$2,800 **2011 credit sales x Ending Allowance Balance = \$2,800 + \$9,600*** + \$0 - \$8,400 = \$4,000 ***2012 credit sales x.04 b. Ending A/R balance = Beginning A/R balance + Credit Sales - Cash Collections Write-Offs A/R (net) = A/R balance Allowance balance 2010 Ending A/R Balance = \$0 + \$105,000 - \$92,000 - \$3,000 = \$10, A/R (net) = \$10,000 - \$1,200 = \$8, Ending A/R Balance = \$10,000 + \$190,000 - \$161,000 - \$6,000 = \$33, A/R (net) = \$33,000 - \$2,800 = \$30, Ending A/R Balance = \$33,000 + \$240,000 - \$214,000 - \$8,400 = \$50, A/R (net) = \$50,600 - \$4,000 = \$46,600 c. In each of the three years shown, Albertson s Locksmith Corporation has estimated bad debts slightly higher than the annual write-offs. The estimates are adequate and provide some cushion for future years in case of a larger-than-anticpated write-off.

10 P6 9 a Current Method Bad debt charge \$ 10,000 \$ 50,000 \$ 20,000 \$ 80,000 \$ 90,000 Accounts rec. value 950, ,000 1,200,000 1,175,000 1,095,000 Allowance Method Bad debt charge \$ 80,000 \$ 78,000 \$ 82,000 \$ 82,560 \$ 79,200 Accounts rec. value 880, ,000 1,040,000 1,012, ,240 Note: Under the allowance method, the net value of Accounts Receivable equals the balance in Accounts Receivable less the balance in Allowance for Doubtful Accounts. b. Current Method Allowance Method Total bad debt charge \$250,000 \$401,760 The allowance method provides a measure of net income consistent with both the revenue recognition and the matching principles. Over the five-year period Fine Linen Service wrote off a total of \$250,000 in Accounts Receivable from sales made in prior years. Under the current method, the \$250,000 did not reduce revenue in the year of the sale. Hence, net income in each individual year was misstated. Under the allowance method, bad debt expense is calculated using the year s sales. Consequently, the allowance method, while an estimate, provides better matching of expenses with the associated revenues. P6 10 a. Bad Debt Charge (E, SE)... 15,000* Allowance for Doubtful Accounts ( A)... 15,000 Estimated bad debt charge. * \$15,000 = \$750,000 December credit sales x 2% Estimated uncollectible percentage b. Ending allowance balance = Beginning allowance balance + Annual bad debt charge + Recoveries Write-offs = \$70,000 + (\$11,940,000 x 2%) + \$0 \$239,000 = \$69,800 c. Ending accounts receivable balance = Beginning accounts receivable balance + Credit sales + Recoveries Cash collections Write-Offs \$3,250,000 (from the aging) = Beginning accounts receivable balance + \$11,940,000 + \$0 \$12,126,000 \$239,000 Beginning accounts receivable balance = \$3,675,000

11 P6 10 Concluded d. Account Age Account Balance Noncollection Probability Uncollectible Amount Current \$700, % \$ 14, days 1,200, % 66, days 550, % 55,000 > 75 days 800, % 200,000 Total \$335,000 Bad Debt Charge (E, SE) ,200* Allowance for Doubtful Accounts ( A) ,200 Estimated bad debt charge. * \$280,200 = \$335,000 Unadjusted Allowance balance = \$335,000 (\$70,000 + \$223,800 of monthly bad debt charge adjusting entries for January through November \$239,000 of accounts written off) e. Some companies use the percent-of-sales method to estimate bad debts but also periodically use the aging method. Companies would use the two methods for several reasons. The percentof-sales method is very easy and comparatively inexpensive to use. Further, the percent-of-sales method emphasizes revenues and expenses, since estimated bad debts are a function of revenues. For these reasons a company is more apt to use the percent-of-sales method than the aging method. Additionally, the aging method can be very costly and time-consuming. For all but the smallest companies, preparing an aging of Accounts Receivable requires a computerized accounting system. However, in return for this increased cost and time, the aging method provides several types of useful information. First, the aging method identifies slow-moving accounts, which may require additional collection efforts. Further, the dollar amount of any particular aging classification dictates the maximum amount that the company should expend in trying to collect the accounts. A company would generally not want to spend more to collect an account than it expects to ultimately collect. Second, an aging can help a company define its credit policies. For example, if an aging identifies a particular customer as a consistently slow payer, the company may decide to no longer extend credit to this customer. If an aging indicates a large percentage of old accounts, this information could be used to decide whether to offer cash discounts and the terms of such discounts. Finally, an aging can indicate the accuracy of the percent-of-sales method. A detailed analysis of Accounts Receivable will usually provide an accurate estimate for the required balance in Allowance for Doubtful Accounts. This estimated balance can be compared to the balance obtained using the percent-of-sales method. Significant differences would indicate a need to revise the percent of sales considered uncollectible. To obtain this information, companies will periodically prepare an aging of Accounts Receivable.

12 ID6 4 a. Allowance for Credit Losses ISSUES FOR DISCUSSION Allowance for loan losses at beginning of year \$16,177 \$8,940 \$9,782 Provision for credit losses consumer 28,282 15,599 6,224 Provision for credit losses corporate 5,392 1, Consumer credit losses 20,002 10,645 8,629 Corporate credit losses 1, Consumer recoveries 1,600 1,661 1,547 Corporate recoveries Allowance for loan losses at end of year 29,616 16,177 8,940 Across the three years, Citi is estimating more and more of its loans to be uncollectible. This trend is caused by the deteriorating economy that moved into a recession in Another trend of interest is the fact that in 2006 Citi underestimated its credit losses in both consumer and corporate but then in 2007 and again in 2008 the bank overestimated its losses (compare the provision lines to the losses lines). It appears that CIti recognized that its previous habit of underestimating had left its Allowance for Credit Losses too small to handle all the bad loans of a full-blown recession. By estimating so high in 2007 and 2008, the bank is setting itself to absorb the losses that may come in 2009 and beyond. b Loans Net Write-Offs % Consumer loans \$519,673 \$18, % Corporate loans 174,543 1, % ID6 6 The above information indicates that the Consumer loan portfolio is the riskier of the two. The Provision for Loan Loss is the expense that feeds into a bank s Allowance for Loan Losses, the contra asset account that adjusts downward the carrying value of the bank s loan portfolio. When banks determine that their loans are less collectible, they bring the portfolio down in value by increasing the Allowance with a higher Provision on the Income Statement. A weakened housing market directly affects the collateral that supports the bank s first mortgage home loan. When a homeowner purchases a home by borrowing money from a bank, the bank takes the house as collateral. If the homeowner is unable to repay the loan, the bank has the right to seize the house (in a foreclosure) and sell the house to recover its money. If housing prices have dropped, the bank will receive less money from the sale of the foreclosed home and will therefore be less likely to recoup all of its cash. To deal with this potential loss, prudent

### E2-2: Identifying Financing, Investing and Operating Transactions?

E2-2: Identifying Financing, Investing and Operating Transactions? Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing or operating

### To find the amount of gross sales, start by determining credit sales. We can do this with the accounts receivable T-account below.

E8-1. Analyzing accounts receivable (AICPA adapted) To find the amount of gross sales, start by determining credit sales. We can do this with the accounts receivable T-account below. Accounts Receivable

### Unit 6 Receivables. Receivables - Claims resulting from credit sales to customers and others goods or services for money,.

Unit 6 Receivables 7-1 Receivables - Claims resulting from credit sales to customers and others goods or services for money,. Oral promises of the purchaser to pay for goods and services sold (credit sale;

### BUS512M. Module 5. Cash and Accounts Receivable BE6-1, E6-4, E6-5, P6-2

BUS512M Module 5 Cash and Accounts Receivable BE6-1, E6-4, E6-5, P6-2 Current Asset Classification A current asset is defined as any asset that is intended to be converted into cash within one year or

### CHAPTER 7 Cash and Receivables

CHAPTER 7 Cash and Receivables 7-1 LECTURE OUTLINE Chapter 7, the first of six asset chapters, covers cash, accounts receivable, and notes receivable. Temporary investments (marketable securities) are

### PULASKI FINANCIAL S SECOND FISCAL QUARTER EPS MORE THAN TRIPLES

PULASKI FINANCIAL S SECOND FISCAL QUARTER EPS MORE THAN TRIPLES Current Versus Prior Year Quarter Highlights Earnings growth - Diluted EPS \$0.29 in 2013 versus \$0.08 in 2012 - Annualized return on average

### It Is In Your Interest

STUDENT MODULE 7.2 BORROWING MONEY PAGE 1 Standard 7: The student will identify the procedures and analyze the responsibilities of borrowing money. It Is In Your Interest Jason did not understand how it

### SAMPLE CONSTRUCTION COMPANY. FINANCIAL STATEMENT AND SUPPLENTARY INFORMANTION For the Year Ended December 31, 2011

FINANCIAL STATEMENT AND SUPPLENTARY INFORMANTION For the Year Ended December 31, 2011 The financial statement, prepared by an independent Certified Public Accountant, is essential for bonding purposes.

Sample Test Questions CHAPTER 7 CASH AND RECEIVABLES Answer No. Description MULTIPLE CHOICE Conceptual d 1. Identification of cash items. b 2. Identification of cash items. d 3. Classification of travel

### 6. It lengthened its payables period, thereby shortening its cash cycle.

Answers to Concepts Review and Critical Thinking Questions 1. These are firms with relatively long inventory periods and/or relatively long receivables periods. Thus, such firms tend to keep inventory

### CONNEXUS ENERGY. Financial statements as of and for the Years Ended December 31, 2010 and 2009, and Independent Auditors Report.

CONNEXUS ENERGY Financial statements as of and for the Years Ended December 31, 2010 and 2009, and Independent Auditors Report. INDEPENDENT AUDITORS REPORT To the Board of Directors of Connexus Energy

### LCGI MORTGAGE FUND, LLC (A CALIFORNIA LIMITED LIABILITY COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2005

(A CALIFORNIA LIMITED LIABILITY COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2005 TABLE OF CONTENTS Page No. Independent Auditors' Report 1 Balance Sheet 2 Statement of Income and Changes in Members' Equity

### CHAPTER 86. C.46:10B-36 Short title. 1. This act shall be known and may be cited as the Save New Jersey Homes Act of 2008.

CHAPTER 86 AN ACT concerning certain residential mortgages, and supplementing Title 46 of the Revised Statutes. BE IT ENACTED by the Senate and General Assembly of the State of New Jersey: C.46:10B-36

### ACCOUNT DEBIT CREDIT Accounts receivable 10,000 Sales 10,000 To record the sale of merchandise to Sophie Company

CURRENT RECEIVABLES Receivables are the amount owed to the organization by its customers and/or others. Current receivables will be collected within one year or the current operating cycle which ever is

### Territorial Bancorp Inc. Announces Second Quarter 2015 Results

PRESS RELEASE FOR IMMEDIATE RELEASE Contact: Walter Ida (808) 946-1400 Territorial Bancorp Inc. Announces Second Quarter 2015 Results Earnings per share for the three months ended June 30, 2015 rose to

### Land Acquisition and Development Finance Part IV

Land Acquisition and Development Finance Part IV In last month s Learn article, we discussed tying up the land and a more in depth formal due diligence process. This article will discuss Development financing.

### Adjustment for Loss from Uncollectible Accounts (accrued expense)

Adjustment for Loss from Uncollectible Accounts (accrued expense) Objective Explain and illustrate the allowance method of accounting for uncollectible accounts receivable. Cite the advantages and disadvantages

Borrowing Money for Your Business After you have developed a cash flow analysis and determined when your business will make profit, you may decide you need additional funding. Borrowing money is one of

### Representative: APPLICATION

14205 SE 36th Street, Suite 350 Bellevue, WA 98006 425-747-9090, FAX 425-747-1404 APPLICATION Representative: To apply for a financing relationship with ACCESS BUSINESS FINANCE, please furnish the supporting

### Investments Advance to subsidiary company 81,000

EXERCISE 7-3 (10 15 minutes) Current assets Accounts receivable Customers Accounts (of which accounts in the amount of \$40,000 have been pledged as security for a bank loan) \$79,000 Installment accounts

### 1. \$45000 2. \$108000 3. \$63000 4. \$135000

For the last several years Monte Cristo Corp. has operated with a gross profit rate of 30%. On January 1 of the current year, the company had on hand inventory with a cost of \$150,000. Purchases of merchandise

### Accounting 201 Comprehensive Practice Exam 2C Page 1

Accounting 201 Comprehensive Practice Exam 2C Page 1 1. A business organized as a corporation a. is not a separate legal entity in most states. b. requires that stockholders be personally liable for the

### Financial Reporting and Analysis Chapter 8 Solutions Receivables. Exercises

Exercises E8-1. Account analysis (AICPA adapted) Financial Reporting and Analysis Chapter 8 Solutions Receivables Exercises To find the amount of gross sales, start by determining credit sales. We can

### Ratios from the Statement of Financial Position

For The Year Ended 31 March 2007 Ratios from the Statement of Financial Position Profitability Ratios Return on Sales Ratio (%) This is the difference between what a business takes in and what it spends

### GBA 521 Midterm Review Dr. Markelevich

GBA 521 Midterm Review Dr. Markelevich Multiple Choice (3 points for each question) Identify the letter of the choice that best completes the statement or answers the question. Wynn Corp. Wynn Corp. reported

### Employee Stock Ownership Plans ("ESOPs") Michael J. Canan, Shareholder GrayRobinson, P.A. Orlando

Employee Stock Ownership Plans ("ESOPs") Michael J. Canan, Shareholder GrayRobinson, P.A. Orlando In appropriate situations, ESOPs can be extremely effective tools for transferring ownership interests

### Accounting 303 Exam 3, Chapters 7-9 Fall 2011 Section Row

Accounting 303 Name Exam 3, Chapters 7-9 Fall 2011 Section Row I. Multiple Choice Questions. (2 points each, 34 points in total) Read each question carefully and indicate your answer by circling the letter

### Application form Residential Mortgage

Application form Residential Mortgage Intermediary details This section requires details of any Broker, Packager, Sub broker, or Network who has an interest in this application. THIS PAGE MUST BE COMPLETED

### Notes to Consolidated Balance Sheet

Notes to Consolidated Balance Sheet 1. Amounts less than one million yen have been omitted. 2. Standards for recognition and measurement of trading assets and liabilities are as follows: Recognition: Trading

### GAZIT-GLOBE (1982) LTD. FINANCIAL STATEMENTS AS OF DECEMBER 31, 2002 ADJUSTED TO THE NIS OF DECEMBER 2002 INDEX. Auditors' Report 2

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2002 ADJUSTED TO THE NIS OF DECEMBER 2002 INDEX Page Auditors' Report 2 Balance Sheets - Consolidated and the Company 3-6 Statements of Income - Consolidated and

### CHAPTER 7 ACCOUNTING FOR RECEIVABLES

CHAPTER 7 ACCOUNTING FOR RECEIVABLES Key Terms and Concepts to Know Accounts Receivable: Result from sales on account (credit sales), not cash sales. May also result from credit card sales if there is

### Shares Mutual funds Structured bonds Bonds Cash money, deposits

FINANCIAL INSTRUMENTS AND RELATED RISKS This description of investment risks is intended for you. The professionals of AB bank Finasta have strived to understandably introduce you the main financial instruments

### The Association will take all possible steps to recover former tenant arrears

B7.1 FORMER TENANTS ARREARS POLICY B7.1.1 B7.1.2 B7.1.3 B7.1.4 B7.1.5 The Association will take all possible steps to recover former tenant arrears Where appropriate, the Association will pursue the debt

### Debt Management & Bad Debt Write- Off Policy

Policy Debt Management & Bad Debt Write- Off Policy Contents Background 2 Purpose Statement 2 Applicability and Scope 2 Responsibilities 2 Definitions 3 Key Policy Actions 3 Principles for the Management

### a. If the risk premium for a given customer is 2.5 percent, what is the simple promised interest return on the loan?

Selected Questions and Exercises Chapter 11 2. Differentiate between a secured and an unsecured loan. Who bears most of the risk in a fixed-rate loan? Why would bankers prefer to charge floating rates,

### TOPIC LEARNING OBJECTIVE

Topic Mapping 1 Transaction Analysis Understand the effect of various types of transactions on the accounting equation, accounting journal and accounting ledger. Concepts and Skills Accounting Equation

BUSINESS LOAN APPLICATION New Relationship Existing Relationship Branch: Officer: BUSINESS INFORMATION Business Name Tax I.D. Individual Name(s) Social Security # Date of Birth: Proprietorship Partnership

### Accounting 303 Exam 3, Chapters 7-9 Fall 2012 Section Row

Accounting 303 Name Exam 3, Chapters 7-9 Fall 2012 Section Row I. Multiple Choice Questions. (2 points each, 34 points in total) Read each question carefully and indicate your answer by circling the letter

### COMMERCE BANCSHARES, INC. ANNOUNCES FOURTH QUARTER EARNINGS PER COMMON SHARE OF \$.63

Exhibit 99.1 1000 Walnut Street / Suite 700 / Kansas City, Missouri 64106 / 816.234.2000 CBSH FOR IMMEDIATE RELEASE: Wednesday, January 20, 2016 COMMERCE BANCSHARES, INC. ANNOUNCES FOURTH QUARTER EARNINGS

### Chapter 8. Receivables

Chapter 8 Receivables Receivables mean amounts owed to the company by others. Accounts Receivable are receivables resulting from the company rendering services or selling products to the public. The company

### Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

Accounting Fundamentals Lesson 5 5.0 Receivables & Investments Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

### Treatment of COD Income by Partnerships

Treatment of COD Income by Partnerships Stafford Presentation January 28, 2015 Polsinelli PC. In California, Polsinelli LLP Allocation of COD Income COD income is allocated to those partners who are partners

### NATIONAL FINANCIAL SERVICES LLC STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2015 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2015 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Report of Independent Registered Public Accounting Firm To the Board of Directors of

### United States General Accounting Office GAO. High-Risk Series. February 1995. Farm Loan Programs GAO/HR-95-9

GAO United States General Accounting Office High-Risk Series February 1995 Farm Loan Programs GAO/HR-95-9 GAO United States General Accounting Office Washington, D.C. 20548 Comptroller General of the

### Sample of Pre-Study Materials for THE DALTON REVIEW

Sample of Pre-Study Materials for THE DALTON REVIEW Review for the CFP Certification Examination THE DALTON REVIEW BROUGHT TO YOU BY DALTON EDUCATION Sample of Pre-Study Materials Dalton Education, L.L.C.

### USING JUDGMENT TO MEASURE THE ALLOWANCE FOR DOUBTFUL ACCOUNTS

Global Perspectives on Accounting Education Volume 7, 2010, 9-17 USING JUDGMENT TO MEASURE THE ALLOWANCE FOR DOUBTFUL ACCOUNTS Catherine A. Finger School of Economics and Business Administration Saint

### At first glance, small business

Severity of Loss in the Event of Default in Small Business and Larger Consumer Loans by Robert Eales and Edmund Bosworth Westpac Banking Corporation has undertaken several analyses of the severity of loss

### MERAFONG CITY LOCAL MUNICIPALITY

MERAFONG CITY LOCAL MUNICIPALITY DEBT WRITE OFF POLICY 2013/2014 Approved debt write off policy 2013/2014 1 INTRODUCTION The purpose of this document is to outline sound principles and practices to be

### MBA Data Analysis Pad John Beasley

1 Marketing Analysis Pad - 1985 Critical Issue: Identify / Define the Problem: Objectives: (Profitability Sales Growth Market Share Risk Diversification Innovation) Company Mission: (Source & Focus for

### 1. This Notice is issued pursuant to section 55 of the Banking Act (Cap. 19) (the Act ) and applies to all banks in Singapore.

MAS NOTICE 632 13 January 2011 Last revised on 28 June 2013 NOTICE TO BANKS BANKING ACT, CAP 19 RESIDENTIAL PROPERTY LOANS 1. This Notice is issued pursuant to section 55 of the Banking Act (Cap. 19) (the

### STATE OF NEW JERSEY NEW JERSEY STATE EMPLOYEES DEFERRED COMPENSATION PLAN Financial Statements June 30, 2006 and 2005 (With Independent Auditors

Financial Statements (With Independent Auditors Report Thereon) KPMG LLP Suite 402 301 Carnegie Center Princeton, NJ 08540-6227 Independent Auditors' Report New Jersey State Employees Deferred Compensation

### Executive Office of the President Office of Management and Budget ACCOUNTING FOR DIRECT LOANS AND LOAN GUARANTEES

Executive Office of the President Office of Management and Budget ACCOUNTING FOR DIRECT LOANS AND LOAN GUARANTEES STATEMENT OF FEDERAL FINANCIAL ACCOUNTING STANDARDS NUMBER 2 July 15, 1993 ************************************************************

### Indiana Community Business Credit Corporation

Indiana Community Business Credit Corporation Financial Statements Years Ended December 31, 2006 and 2005 Strength in numbers. Contents Independent Auditors Report 1 Financial Statements Balance Sheets

### Supervisor of Banks: Proper Conduct of Banking Business [9] (4/13) Sound Credit Risk Assessment and Valuation for Loans Page 314-1

Sound Credit Risk Assessment and Valuation for Loans Page 314-1 SOUND CREDIT RISK ASSESSMENT AND VALUATION FOR LOANS Principles for sound credit risk assessment and valuation for loans: 1. A banking corporation

### Enterprise Valuation of Private Investments Policy

Enterprise Valuation of Private Investments Policy Policy Sponsor: CFO Summary: This accounting policy applies to all private investments, represented by directly held real estate assets (i.e., revenue

### Accounting for Microfinance Organizations

The Russia Microfinance Project Document No.54 A U.S. Department of State/NISCUP Funded Partnership among the University of Washington-Evans School of Public Affairs, The Siberian Academy of Public Administration,

### Financial Statements and Report of Independent Certified Public Accountants

Financial Statements and Report of Independent Certified Public Accountants United States Olympic and Paralympic Foundation Contents Page Report of Independent Certified Public Accountants 2 Statements

### North East Lincolnshire Council. Debt Management Strategy

North East Lincolnshire Council Debt Management Strategy Section Title Page No 1. Introduction 2. General Principles 3. Principles common to all debts 4. Principles of Enforcement 5. Strategy specific

### CHAPTER 8. Reporting and Analyzing Receivables ANSWERS TO QUESTIONS

CHAPTER 8 Reporting and Analyzing Receivables ANSWERS TO QUESTIONS 1. Accounts receivable are amounts customers owe on account. They result from the sale of goods and services (i.e., in trade). Notes receivable

### Accounting 303 Exam 3, Chapters 7-9 Fall 2013 Section Row

Accounting 303 Name Exam 3, Chapters 7-9 Fall 2013 Section Row I. Multiple Choice Questions. (2 points each, 28 points in total) Read each question carefully and indicate your answer by circling the letter

### Scott s Real Estate Investment Trust. Interim Consolidated Financial Statements (Unaudited) March 31, 2009 and 2008

Interim Consolidated Financial Statements March 31, and Interim Consolidated Balance Sheets (in thousands of dollars) Assets March 31, December 31, Income-producing properties (note 3) 172,404 174,135

### Mortgage Forgiveness Debt Relief Act. Cancellation of Debt (COD) Income. Recourse Loan 10/6/2014. Consequences of the expiration of the act

Mortgage Forgiveness Debt Relief Act Consequences of the expiration of the act Cancellation of Debt (COD) Income When a loan is forgiven without being paid back, COD Income is created. That amount is included

### Pivotal Issues When Managing. Chapter 7. Cash and Receivables. Skyline College Lecture Notes. Cash Considerations. Cash Requirements.

Chapter 7 Cash and Receivables Skyline College Lecture Notes Pivotal Issues When Managing Cash and Receivables 1. Cash needs 2. Credit policies 3. Level of accounts receivable 4. Financing receivables

### Chapter 8. Reporting and Analyzing Receivables

Chapter 8 Reporting and Analyzing Receivables Study Objective 1 - Identify the Different Types of Receivables The term receivables refers to amounts due from individuals and companies. Receivables are

### University of Kentucky

University of Kentucky Debt Policy Purpose To fulfill its mission, the University of Kentucky must make ongoing strategic capital investments in academic, student life, healthcare, and other plant facilities

### Review of what we studied so far

Review of what we studied so far We have studied 2 reasons why banks (more generally a financial system) are useful: 1. by monitoring firms and making it harder for entrepreneurs to shirk banks allow projects

### The University Of California Home Loan Program Corporation (A Component Unit of the University of California)

Report Of Independent Auditors And Financial Statements The University Of California Home Loan Program Corporation (A Component Unit of the University of California) As of and for the periods ended June

### SHORT INTRODUCTION OF SHORT SELLING

Financial Assets and Investing SHORT INTRODUCTION OF SHORT SELLING Dagmar Linnertová Faculty of Economics and Administration, Masaryk University, Lipová 41a, 602 00 Brno, e-mail: Dagmar.Linnertova@mail.muni.cz

### Securing a Conventional Business Loan

Passaic County Department of Economic Development Securing a Conventional Business Loan October 16, 2013 Our Mission To Pull Back the Curtain We want to show you how we operate and what we look for Common

### Medium-term or Intermediate Term Financing

Medium-term or Intermediate Term Financing Medium term finance [loan] is usually provided from three to ten years; Such finance is Obtained for meeting the cost of maintenance, repair, improvement and

### Flexible Lifetime Mortgage Product Summary

Flexible Lifetime Mortgage Product Summary The Flexible Lifetime Mortgage provides you with an initial cash sum in the form of a mortgage loan. A legal charge is secured on your home. For as long as you

### A Guide to LLCs. Forming a Limited Liability Company

A Guide to LLCs Forming a Limited Liability Company Advantages of Forming an LLC Real Estate Investments and LLCs Operating and Maintaining an LLC Comparing LLCs to Other Business Structures Table of Contents

### GAO FARM LOAN PROGRAMS. Improvements in the Loan Portfolio but Continued Monitoring Needed. Testimony

GAO United States General Accounting Office Testimony Before the Committee on the Agriculture, Nutrition, and Forestry, U.S. Senate For Release on Delivery Expected at 9 a.m., EDT Wednesday, May 16, 2001

### By Ronald A. Sarachan and Daniel J. T. McKenna

By Ronald A. Sarachan and Daniel J. T. McKenna Since 2007 the Federal Bureau of Investigation and the Securities and Exchange Commission have opened more than 1,200 criminal investigations and three dozen

### SS.912.FL.4.3. Assignment 8 Steps 1 and 2

FL-V2-012015 Standard 4: Using Credit Code SS.912.FL.4.1 Discuss ways that consumers can compare the cost of credit by using the annual percentage rate (APR), initial fees charged, and fees charged for

### FNCE 301, Financial Management H Guy Williams, 2006

Stock Valuation Stock characteristics Stocks are the other major traded security (stocks & bonds). Options are another traded security but not as big as these two. - Ownership Stockholders are the owner

### Cash in bank checking account \$22,500 U.S. treasury bills 5,000 Cash on hand 1,350 Undeposited customer checks 1,840 Total \$30,690 Requirement 2

Chapter 7 Solutions EXERCISES Exercise 7 2 Cash and cash equivalents includes: Cash in bank checking account \$22,500 U.S. treasury bills 5,000 Cash on hand 1,350 Undeposited customer checks 1,840 Total

### CHAPTER 8 WHEN REVENUE IS RECOGNIZED RECOGNIZED HOW REVENUE IS REVENUE CYCLE: SALES, RECEIVABLES, AND CASH

CHAPTER 8 REVENUE CYCLE: SALES, RECEIVABLES, AND CASH 1 WHEN REVENUE IS RECOGNIZED Revenue should be recognized when two criteria are met: The promised work has been substantially completed Cash, or a

### The FOS Approach Mortgagee sales

1 At a glance 2 1.1 Scope 2 1.2 Summary 2 2 In detail 3 2.1 Taking reasonable care 3 2.2 Valuing the property 4 2.3 Marketing the property 4 2.4 Maintaining or improving the property 6 2.5 Selling the

### BankersHub.com December 2014 Newsletter Page - 1

BankersHub.com December 2014 Newsletter Page - 1 Newsletter Article December, 2014 A NEW WAY TO CALCULATE THE CUSHION Editorial Content by Paul Sanchez, CPA, CBA, CFSA, Reprinted with permission from November

### Securitization of Assets: An Accounting and Finance Case. John W. Briggs James Madison University. Joseph D. Beams University of New Orleans

THE ACCOUNTING EDUCATORS JOURNAL Volume XXII 2012 pp. 25 42 Securitization of Assets: An Accounting and Finance Case John W. Briggs James Madison University Joseph D. Beams University of New Orleans Abstract

### Finance Decisions Help Explanations Information on Rules/Procedures

Finance Decisions Help Explanations Information on Rules/Procedures The finance decisions screen provides you with detailed information relating to your company s quarterly cash inflows and outflows and

### DEBT FUNDING GUIDELINES FOR LOCAL GOVERNMENT

DEBT FUNDING GUIDELINES FOR LOCAL GOVERNMENT The Context Local government financial statements, like those of other sectors of government and the corporate sector, include many items of considerable financial

### Investment Companies

Mutual Funds Mutual Funds Investment companies Financial intermediaries that collect funds form individual investors and invest those funds in a potentially wide rande of securities or other asstes Polling

### National Margin Lending. Make your investment portfolio work for you

National Margin Lending Make your investment portfolio work for you Contents What is Margin Lending? 3 Why choose National Margin lending? 5 Why gear? 6 How much can you borrow with National Margin Lending?

### Introduction to Australian Real Estate Debt Securities

1 Introduction Introduction to Australian Real Estate Debt Securities Superannuation fund investors and managers have for a long time invested in real estate as part of their asset allocation in the belief

### Volume Publisher: Princeton University Press. Volume URL: http://www.nber.org/books/smit64-1. Chapter URL: http://www.nber.

This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Consumer Credit Costs, 1949 59 Volume Author/Editor: Paul F. Smith Volume Publisher: Princeton

### Retirement Annuity Contract & Self-Invested Personal Pension ( SIPP ) Company. Guidance Notes & Key Features

Retirement Annuity Contract & Self-Invested Personal Pension ( SIPP ) Company Guidance Notes & Key Features Background The Income Tax (Jersey) Law 1961 allows individuals to look after their own pension

### Securities Lending 101

Securities Lending 101 Los Angeles City Employees Retirement System Pension Consulting Alliance, Inc. July 2010 1 What is Securities Lending? DEFINITION Securities lending is the market practice where

### Chapter 8 Accounting for Receivables

Chapter 8 Accounting for Receivables Accounts Receivable Accounts Receivables are current assets. They are usually expected to be collected within 30 days. Allowance Method and Bad Debt Expense 2 methods:

### Cash and Receivables. Chapter. Learning Objectives. Nature and Composition of Cash. Additional Cash Issues

Learning Objectives Cash and Receivables No substantial departures from the text, Chapter 7. Chapter 7 7-1 UCSB, Anderson 7-2 UCSB, Anderson Nature and Composition of Cash Cash is classified as a... Current

### NATIONAL SURVEY OF HOME EQUITY LOANS

NATIONAL SURVEY OF HOME EQUITY LOANS Richard T. Curtin Director, Surveys of Consumers Survey Research Center The October 1998 WP51 The 1988, 1994, and 1997 National Surveys of Home Equity Loans were sponsored

### Inquiry into Access of Small Business to Finance

Inquiry into Access of Small Business to Finance Reference http://www.aph.gov.au/senate/committee/economics_ctte/small_business_10/ index.htm The current structure of the financial system means that large

### HOUSEHOLD DEBT AND CREDIT

QUARTERLY REPORT ON HOUSEHOLD DEBT AND CREDIT FEDERAL RESERVE BANK OF NEW YORK RESEARCH AND STATISTICS GROUP MICROECONOMIC STUDIES Household Debt and Credit Developments in 2014 Q4 1 Aggregate household

### A guide to investing in cash alternatives

A guide to investing in cash alternatives What you should know before you buy Wells Fargo Advisors wants to help you invest in cash alternative products that are suitable for you based on your investment

### CHAPTER 7. Cash and Receivables. 1. Accounting for cash. 1, 2, 3, 4, 21 1 1, 2 1 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 8, 9, 10, 11, 12

CHAPTER 7 Cash and Receivables ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Accounting for cash. 1, 2, 3, 4, 21 1 1, 2 1 2. Accounting