Chapter 7 Cash and Receivables
|
|
- Amos O’Connor’
- 7 years ago
- Views:
Transcription
1 Chapter 7 Cash and Receivables QUESTIONS FOR REVIEW OF KEY TOPICS Question 7-1 Cash equivalents usually include negotiable instruments as well as highly liquid investments that have a maturity date no longer than three months from date of purchase. Question 7-2 Internal control procedures involving accounting functions are intended to improve the accuracy and reliability of accounting information and to safeguard the company s assets. The separation of duties means that employees involved in recordkeeping should not also have physical responsibility for assets. Question 7-3 Management must document the company s internal controls and assess their adequacy. The auditors must provide an opinion on management s assessment. The Public Company Accounting Oversight Board s Auditing Standard No. 2 further requires the auditor to express its own opinion on whether the company has maintained effective internal control over financial reporting Question 7-4 A compensating balance is an amount of cash a depositor (debtor) must leave on deposit in an account at a bank (creditor) as security for a loan or a commitment to lend. The classification and disclosure of a compensating balance depends on the nature of the restriction and the classification of the related debt. If the restriction is legally binding, then the cash will be classified as either current or noncurrent depending on the classification of the related debt. In either case, note disclosure is appropriate. If the compensating balance arrangement is informal and no contractual agreement restricts the use of cash, note disclosure of the arrangement including amounts involved is appropriate. The compensating balance can be included in the cash and cash equivalents category of current assets. Question 7-5 Trade discounts are reductions below a list price and are used to establish a final price for a transaction. The reduced price is the starting point for initial valuation of the transaction. A cash discount is a reduction, not in the selling price of a good or service, but in the amount to be paid by a credit customer if the receivable is paid within a specified period of time. Question 7-6 The gross method of accounting for cash discounts considers discounts not taken as part of sales revenue. The net method considers discounts not taken as interest revenue, because they are viewed as compensation to the seller for allowing the buyer to defer payment. Solutions Manual, Vol.1, Chapter 7 7-1
2 Answers to Questions (continued) Question 7-7 When returns are material and a company can make reasonable estimates of future returns, an allowance for sales returns is established. At a financial reporting date, this provides an estimate of the amount of future returns for prior sales, and involves a debit to sales returns and a credit to allowance for sales returns for the estimated amount. Allowance for sales returns is a contra account to accounts receivable. When returns actually occur in the future reporting period, the allowance for sales returns is debited. Question 7-8 Even when specific customer accounts haven t been proven uncollectible by the end of the reporting period, bad debt expense properly should be matched with sales revenue on the income statement for that period. Likewise, since it s not expected that all accounts receivable will be collected, the balance sheet should report only the expected net realizable value of that asset. So, to record the bad debt expense and the related reduction of accounts receivable when the amount hasn t been determined, an estimate is needed. In an adjusting entry, we record bad debt expense and reduce accounts receivable for an estimate of the amount that eventually will prove uncollectible. If uncollectible accounts are immaterial or not anticipated, or it s not possible to reliably estimate uncollectible accounts, an allowance for uncollectible accounts is not appropriate. In these few cases, any bad debts that do arise simply are written off as bad debt expense. Question 7-9 The income statement approach to estimating bad debts determines bad debt expense directly by relating uncollectible amounts to credit sales. The balance sheet approach to estimating future bad debts indirectly determines bad debt expense by estimating the net realizable value for accounts receivable that exist at the end of the period. In other words, the allowance for uncollectible accounts at the end of the period is estimated and then bad debt expense is determined by adjusting the allowance account to reflect net realizable value. Question 7-10 The assignment of all accounts receivable in general as collateral for debt requires no special accounting treatment other than note disclosure of the agreement. Question 7-11 Accounts receivable factored without recourse are accounted for as the sale of an asset. The difference between the book value and the proceeds received is recognized as a gain or a loss. The accounting treatment of receivables factored with recourse depends on whether certain criteria are met. If the criteria are met, the factoring is accounted for as a sale. If they are not met, the factoring is accounted for as a loan. In addition, note disclosure may be required. 7-2 Intermediate Accounting, 4/e
3 Answers to Questions (concluded) Question 7-12 When a note is discounted, a financial institution, usually a bank, accepts the note and gives the seller cash equal to the maturity value of the note reduced by a discount. The discount is computed by applying a discount rate to the maturity value and represents the financing fee the bank charges for the transaction. The four-step process used to account for a discounted note receivable is as follows: 1. Accrue any interest revenue earned since the last payment date (or date of the note). 2. Compute the maturity value. 3. Subtract the discount the bank requires (discount rate times maturity value times the length of time from date of discounting to maturity date) from the maturity value to compute the proceeds to be received from the bank (maturity value less discount). 4. Compute the difference between the proceeds and the book value of the note and related interest receivable. The treatment of the difference will depend on whether the discounting is accounted for as a sale or as a loan. If it s a sale the difference is recorded as a loss or gain on the sale; if it s a loan the difference is viewed as interest expense or interest revenue. Question 7-13 A company s investment in receivables is influenced by several related variables, to include the level of sales, the nature of the product or service, and credit and collection policies. The receivables turnover and average collection period ratios are designed to monitor receivables. Question 7-14 The items necessary to adjust the bank balance might include deposits outstanding (including undeposited cash), outstanding checks, and any bank errors discovered during the reconciliation process. The items necessary to adjust the book balance might include collections made by the bank on the company s behalf, service and other charges made by the bank, NSF (nonsufficient funds) check charges, and any company errors discovered during the reconciliation process. Question 7-15 A petty cash fund is established by transferring a specified amount of cash from the company s general checking account to an employee designated as the petty cash custodian. The fund is replenished by writing a check to the petty cash custodian for the sum of the bills paid with petty cash. The appropriate expense accounts are recorded from petty cash vouchers at the time the fund is replenished. Solutions Manual, Vol.1, Chapter 7 7-3
4 BRIEF EXERCISES Brief Exercise 7-1 The company could improve its internal control procedure for cash receipts by segregating the duties of recordkeeping and the handling of cash. Jim Seymour, responsible for recordkeeping, should not also be responsible for depositing customer checks. Brief Exercise 7-2 All of these items would be included as cash and cash equivalents except the U.S. Treasury bills, which would be included in the current asset section of the balance sheet as short-term investments. Brief Exercise 7-3 Income before tax in 2007 will be reduced by $2,500, the amount of the cash discounts. $25,000 x 10 = $250,000 x 1% = $2,500 Brief Exercise 7-4 Income before tax in 2006 will be reduced by $2,500, the anticipated amount of cash discounts. $25,000 x 10 = $250,000 x 1% = $2, Intermediate Accounting, 4/e
5 Brief Exercise 7-5 Estimated returns = $10,600,000 x 8% = $848,000 Less: Actual returns (720,000) Remaining estimated returns $128,000 Sales returns ,000 Allowance for sales returns ,000 Inventory... 76,800 Cost of goods sold ($128,000 x 60%)... 76,800 Brief Exercise 7-6 (1) Bad debt expense = $1,500,000 x 2% = $30,000 (2) Allowance for uncollectible accounts: Beginning balance $25,000 Add: Bad debt expense 30,000 Deduct: Write-offs (16,000) Ending balance $39,000 Solutions Manual, Vol.1, Chapter 7 7-5
6 Brief Exercise 7-7 (1) Allowance for uncollectible accounts: Beginning balance $ 25,000 Deduct: Write-offs (16,000) Required allowance (33,400)* Bad debt expense $24,400 (2) Required allowance = $334,000** x 10% = $33,400* Accounts receivable: Beginning balance $ 300,000 Add: Credit sales 1,500,000 Deduct: Cash collections (1,450,000) Write-offs (16,000) Ending balance $ 334,000** Brief Exercise 7-8 Allowance for uncollectible accounts: Beginning balance $30,000 Add: Bad debt expense 40,000 Deduct: Required allowance (38,000) Write-offs $32, Intermediate Accounting, 4/e
7 Brief Exercise 7-9 Credit sales $8,200,000 Deduct: Cash collections (7,950,000) Write-offs (32,000)* Year-end balance in A/R (2,000,000) Beginning balance in A/R $1,782,000 *Allowance for uncollectible accounts: Beginning balance $30,000 Add: Bad debt expense 40,000 Deduct: Required allowance (38,000) Write-offs $32,000 Brief Exercise interest revenue: $20,000 x 6% x 1 /12 = $ interest revenue: $20,000 x 6% x 2 /12 = $200 Solutions Manual, Vol.1, Chapter 7 7-7
8 Brief Exercise 7-11 Assets decrease by $3,000: Cash increases by $100,000 x 85% = $ 85,000 Receivable from factor increases by ([15% x $100,000] $3,000 fee) 12,000 Accounts receivable decrease (100,000) Net decrease in assets $ (3,000) Liabilities would not change as a result of this transaction. Income before income taxes decreases by $3,000, the amount of the factor s fee. ($100,000 x 3%) The journal entry to record the transaction is as follows: Cash (85% x $100,000)... 85,000 Loss on sale of receivables (3% x $100,000)... 3,000 Receivable from factor ([15% x $100,000] $3,000 fee)... 12,000 Accounts receivable (balance sold) ,000 Brief Exercise 7-12 Logitech would account for the transfer as a secured borrowing. The receivables would remain on the company s books and a liability is recorded for the amount borrowed plus the bank s fee. 7-8 Intermediate Accounting, 4/e
9 Brief Exercise 7-13 $30,000 Face amount 450 Interest to maturity ($30,000 x 6% x 3 / 12 ) 30,450 Maturity value (406) Discount ($30,450 x 8% x 2 / 12 ) $30,044 Cash proceeds Brief Exercise 7-14 Receivables turnover = $320,000 = 5.33 $60,000* ($50, ,000) 2 = $60,000* Average collection = 365 = 68 days period 5.33 Solutions Manual, Vol.1, Chapter 7 7-9
10 EXERCISES Exercise 7-1 Requirement 1 Cash and cash equivalents includes: a. Balance in checking account $13,500 Balance in savings account 22,100 b. Undeposited customer checks 5,200 c. Currency and coins on hand 580 f. U.S. treasury bills with 2-month maturity 15,000 Total $56,380 Requirement 2 d. The $400,000 savings account will be used for future plant expansion and therefore should be classified as a noncurrent asset, either in other assets or investments. e. The $20,000 in the checking account is a compensating balance for a longterm loan and should be classified as a noncurrent asset, either in other assets or investments. f. The $20,000 in 7-month treasury bills should be classified as a current asset along with other temporary investments Intermediate Accounting, 4/e
11 Exercise 7-2 Requirement 1 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 $30,690 Requirement 2 The $10,000 in 6-month treasury bills should be classified as a current asset along with other temporary investments. Solutions Manual, Vol.1, Chapter
12 Exercise 7-3 Requirement 1 Sales price = 100 units x $600 = $60,000 x 70% = $42,000 November 17, 2006 Accounts receivable... 42,000 Sales revenue... 42,000 November 26, 2006 Cash (98% x $42,000)... 41,160 Sales discounts (2% x $42,000) Accounts receivable... 42,000 Requirement 2 November 17, 2006 Accounts receivable... 42,000 Sales revenue... 42,000 December 15, 2006 Cash... 42,000 Accounts receivable... 42, Intermediate Accounting, 4/e
13 Exercise 7-3 (concluded) Requirement 3 Requirement 1: November 17, 2006 Accounts receivable... 41,160 Sales revenue (98% x $42,000)... 41,160 November 26, 2006 Cash... 41,160 Accounts receivable... 41,160 Requirement 2: November 17, 2006 Accounts receivable... 41,160 Sales revenue (98% x $35,000)... 41,160 December 15, 2006 Cash... 42,000 Accounts receivable... 41,160 Interest revenue Solutions Manual, Vol.1, Chapter
14 Exercise 7-4 Requirement 1 Sales price = 1,000 units x $50 = $50,000 July 15, 2006 Accounts receivable... 50,000 Sales revenue... 50,000 July 23, 2006 Cash (98% x $50,000)... 49,000 Sales discounts (2% x $50,000)... 1,000 Accounts receivable... 50,000 Requirement 2 July 15, 2006 Accounts receivable... 50,000 Sales revenue... 50,000 Aug. 15, 2006 Cash... 50,000 Accounts receivable... 50, Intermediate Accounting, 4/e
15 Exercise 7-5 Requirement 1 July 15, 2006 Accounts receivable... 49,000 Sales revenue (98% x $50,000)... 49,000 July 23, 2006 Cash... 49,000 Accounts receivable... 49,000 Requirement 2 July 15, 2006 Accounts receivable... 49,000 Sales revenue (98% x $50,000)... 49,000 August 15, 2006 Cash... 50,000 Accounts receivable... 49,000 Interest revenue... 1,000 Solutions Manual, Vol.1, Chapter
16 Exercise 7-6 Requirement 1 $67,500 (1.5% x $4,500,000) Requirement 2 Allowance for uncollectible accounts Balance, beginning of year $42,000 Add: Bad debt expense for 2006 (1.5% x $4,500,000) 67,500 Less: End-of-year balance (40,000) Accounts receivable written off $69,500 Requirement 3 $69,500 the amount of accounts receivable written off Intermediate Accounting, 4/e
17 Exercise 7-7 Requirement 1 To record the write-off of receivables. Allowance for uncollectible accounts... 21,000 Accounts receivable... 21,000 To record the collection of a receivable previously written off. Accounts receivable... 1,200 Allowance for uncollectible accounts... 1,200 Cash... 1,200 Accounts receivable... 1,200 Allowance for uncollectible accounts: Balance, beginning of year $32,000 Deduct: Receivables written off (21,000) Add: Collection of receivable previously written off 1,200 Balance, before adjusting entry for 2006 bad debts 12,200 Required allowance: 10% x $625,000 (62,500) Bad debt expense $50,300 To record bad debt expense for the year. Bad debt expense... 50,300 Allowance for uncollectible accounts... 50,300 Requirement 2 Current assets: Accounts receivable, net of $62,500 in allowance for uncollectible accounts $562,500 Solutions Manual, Vol.1, Chapter
18 Exercise 7-8 Using the direct write-off method, bad debt expense is equal to actual write-offs. Collections of previously written-off receivables are recorded as revenue. Allowance for uncollectible accounts: Balance, beginning of year $17,280 Deduct: Receivables written off (17,100) Add: Collection of receivables previously written off 2,200 Less: End of year balance (22,410) Bad debt expense for the year 2006 $20,030 Exercise 7-9 ($ in millions) Allowance for uncollectible accounts: Balance, beginning of year $242 Add: Bad debt expense 44 Less: End of year balance (166) Write-offs during the year $120* Accounts receivable analysis: Balance, beginning of year ($5, ) $ 5,438 Add: Credit sales 36,835 Less:Write-offs* (120) Less: Balance end of year ($5, ) (6,056) Cash collections $36, Intermediate Accounting, 4/e
19 Exercise 7-10 Requirement 1 June 30, 2006 Note receivable... 30,000 Sales revenue... 30,000 December 31, 2006 Interest receivable Interest revenue ($30,000 x 6% x 6 / 12 ) March 31, 2007 Cash [$30,000 + ($30,000 x 6% x 9 / 12)]... 31,350 Interest revenue ($30,000 x 6% x 3 / 12 ) Interest receivable (accrued at December 31) Note receivable... 30,000 Requirement income before income taxes would be understated by $ income before income taxes would be overstated by $900. Solutions Manual, Vol.1, Chapter
20 Exercise 7-11 Requirement 1 June 30, 2006 Note receivable (face amount)... 30,000 Discount on note receivable ($30,000 x 8% x 9 / 12 )... 1,800 Sales revenue (difference)... 28,200 December 31, 2006 Discount on note receivable... 1,200 Interest revenue ($30,000 x 8% x 6 / 12)... 1,200 March 31, 2007 Discount on note receivable Interest revenue ($30,000 x 8% x 3 / 12) Cash... 30,000 Note receivable (face amount)... 30,000 Requirement 2 $ 1,800 interest for 9 months $28,200 sales price = 6.38% rate for 9 months x 12/ 9 to annualize the rate = 8.51% effective interest rate 7-20 Intermediate Accounting, 4/e
21 Exercise 7-12 Requirement 1 Book value of stock $16,000 Plus gain on sale of stock 6,000 = Note receivable $22,000 Interest reported for the year $ 2,200 Divided by value of note $ 22,000 = 10% rate Requirement 2 To record sale of stock in exchange for note receivable. January 1, 2006 Note receivable... 22,000 Investments... 16,000 Gain on sale of investments... 6,000 To accrue interest on note receivable for twelve months. December 31, 2006 Interest receivable... 2,200 Interest revenue ($22,000 x 10%)... 2,200 Exercise a 2. a 3. a 4. a Solutions Manual, Vol.1, Chapter
22 Exercise 7-14 Cash (difference) ,200 Finance charge expense (1.8% x $600,000)... 10,800 Liability financing arrangement ,000 Exercise 7-15 Cash (90% x $60,000)... 54,000 Loss on sale of receivables (2% x $60,000)... 1,200 Receivable from factor ([10% x $60,000] $1,200 fee)... 4,800 Accounts receivable (balance sold)... 60,000 Exercise 7-16 Cash (90% x $60,000)... 54,000 Loss on sale of receivables ([2% x $60,000] + $3,000)... 4,200 Receivable from factor ([10% x $60,000] $1,200 fee)... 4,800 Recourse liability... 3,000 Accounts receivable (balance sold)... 60, Intermediate Accounting, 4/e
23 Exercise 7-17 Step 1: Accrue interest earned. February 28, 2006 Interest receivable Interest revenue ($15,000 x 10% x 2 / 12 ) Step 2: Add interest to maturity to calculate maturity value. Step 3: Deduct discount to calculate cash proceeds. $15,000 Face amount 750 Interest to maturity ($15,000 x 10% x 6 / 12 ) 15,750 Maturity value (630) Discount ($15,750 x 12% x 4 / 12 ) $15,120 Cash proceeds Step 4: To record a loss for the difference between the cash proceeds and the note s book value. February 28, 2006 Cash (proceeds determined above)... 15,120 Loss on sale of note receivable (difference) Note receivable (face amount)... 15,000 Interest receivable (accrued interest determined above) Exercise d 2. c Solutions Manual, Vol.1, Chapter
24 Exercise 7-19 List A List B c 1. Internal control a. Restriction on cash. j 2. Trade discount b. Cash discount not taken is sales revenue. g 3. Cash equivalents c. Includes separation of duties. h 4. Allowance for uncollectibles d. Bad debt expense a % of credit sales. i 5. Cash discount e. Recognizes bad debts as they occur. l 6. Balance sheet approach f. Sale of receivables to a financial institution. d 7. Income statement approach g. Include highly liquid investments. k 8. Net method h. Estimate of bad debts. a 9. Compensating balance i. Reduction in amount paid by credit customer. m 10. Discounting j. Reduction below list price. b 11. Gross method k. Cash discount not taken is interest revenue. e 12. Direct write-off method l. Bad debt expense determined by estimating realizable value. f 13. Factoring m. Sale of note receivable to a financial institution Intermediate Accounting, 4/e
25 Exercise 7-20 Requirement 1 March 17, 2006 Allowance for uncollectible accounts... 1,700 Accounts receivable... 1,700 March 30, 2006 Note receivable... 20,000 Cash... 20,000 Step 1: To accrue interest earned for two months on note receivable May 30, 2006 Interest receivable Interest revenue ($20,000 x 7% x 2 / 12 ) Step 2: Add interest to maturity to calculate maturity value. Step 3: Deduct discount to calculate cash proceeds. $20,000 Face amount 1,400 Interest to maturity ($20,000 x 7%) 21,400 Maturity value (1,427) Discount ($21,400 x 8% x 10 / 12 ) $19,973 Cash proceeds Solutions Manual, Vol.1, Chapter
26 Exercise 7-20 (continued) Step 4: To record a loss for the difference between the cash proceeds and the note s book value. May 30, 2006 Cash (proceeds determined above)... 19,973 Loss on sale of note receivable (difference) Interest receivable (from adjusting entry) Note receivable (face amount)... 20,000 June 30, 2006 Accounts receivable... 12,000 Sales revenue... 12,000 July 8, 2006 Cash ($12,000 x 98%)... 11,760 Sales discounts ($12,000 x 2%) Accounts receivable... 12,000 August 31, 2006 Notes receivable (face amount)... 6,000 Discount on note receivable ($6,000 x 8% x 6 / 12 ) Investments (book value)... 5,000 Gain on sale of investments (difference) December 31, 2006 Bad debt expense ($700,000 x 2%)... 14,000 Allowance for uncollectible accounts... 14, Intermediate Accounting, 4/e
27 Exercise 7-20 (concluded) Requirement 2 To accrue interest earned on note receivable. December 31, 2006 Discount on note receivable Interest revenue ($6,000 x 8% x 4 / 12 ) Exercise 7-21 Second quarter: Receivables turnover = 5,398 = ,714 Average collection = 91 = 29 days period 3.15 Third quarter: Receivables turnover = 5,620 = ,790 Average collection = 91 = 29 days period 3.14 Solutions Manual, Vol.1, Chapter
28 Exercise 7-22 Average collection period = 365 Accounts receivable turnover = 50 days Accounts receivable turnover = = 7.3 Average accounts receivable = ($400, ,000) 2 = $350,000 Accounts receivable turnover = Net sales Average accounts receivable 7.3 = Net sales $350,000 Net sales = 7.3 x $350,000 = $2,555,000 Exercise c. The allowance method records bad debt expense systematically as a percentage of either sales or the level of accounts receivable. The latter calculation considers the amount already existing in the allowance account. The credit is to a contra asset or allowance account. As accounts receivable are written off, they are charged to the allowance account. 2. d. If a company uses the allowance method, the write-off of a receivable has no effect on total assets. The journal entry involves a debit to the allowance account and a credit to accounts receivable. The net effect is that the asset section is both debited and credited for the same amount. Thus, there will be no effect on either total assets or net income. 3. c. The entry is to debit bad debt expense and credit the allowance account. Net credit sales were $1,500,000 ($1,800,000 - $125,000 of discounts - $175,000 of returns). Thus, the expected bad debt expense is $22,500 (1.5% x $1,500,000). This amount is recorded regardless of the balance remaining in the allowance account from previous periods. The net effect is that the allowance account is increased by $22, Intermediate Accounting, 4/e
29 Exercise 7-24 To establish the petty cash fund. October 2, 2006 Petty Cash Cash (checking account) To replenish the petty cash fund. October 31, 2006 Office supplies expense Entertainment expense Postage expense Miscellaneous expense Cash (checking account) Exercise 7-25 Compute balance per bank statement: Balance per books $23,820 Deduct: Deposits outstanding (2,340) Add: Checks outstanding 1,890 Deduct: Bank service charges (38) Balance per bank $23,332 Step 1: Bank Balance to Corrected Balance Balance per bank statement $23,332 Add: Deposits outstanding 2,340 Deduct: Checks outstanding (1,890) Corrected cash balance $23,782 Step 2: Book Balance to Corrected Balance Balance per books $23,820 Deduct: Service charges (38) Corrected cash balance $23,782 Solutions Manual, Vol.1, Chapter
30 Exercise 7-26 Requirement 1 Step 1: Bank Balance to Corrected Balance Balance per bank statement $38,018 Add: Deposits outstanding 6,300 Deduct: Checks outstanding (8,420) Add: Bank error in recording check 270 Corrected cash balance $36,168 Step 2: Book Balance to Corrected Balance Balance per books $38,918 Add: Error in recording cash receipt ($2, ) 1,800 Deduct: Service charges (30) NSF checks (1,200) Automatic monthly loan payment (3,320) Corrected cash balance $36,168 Requirement 2 To correct error in recording cash receipt from credit customer. Cash... 1,800 Accounts receivable... 1,800 To record credits to cash revealed by the bank reconciliation. Miscellaneous expense (bank service charges). 30 Accounts receivable (NSF checks)... 1,200 Interest expense Note payable... 3,000 Cash... 4,550 Note: Each of the adjustments to the book balance required journal entries. None of the adjustments to the bank balance require entries Intermediate Accounting, 4/e
31 PROBLEMS Problem 7-1 Requirement 1 Monthly bad debt expense accrual summary. Bad debt expense (3% x $2,620,000)... 78,600 Allowance for uncollectible accounts... 78,600 To record year 2006 accounts receivable write-offs. Allowance for uncollectible accounts... 68,000 Accounts receivable... 68,000 Requirement 2 Bad debt expense... 4,300 Allowance for uncollectible accounts (below)... 4,300 Year-end required allowance for uncollectible accounts: Summary Percent Estimated Age Group Amount Uncollectible Allowance 0-60 days $430,000 4% $17, days 98,000 15% 14, days 60,000 25% 15,000 Over 120 days 55,000 40% 22,000 Totals $643,000 $68,900 Solutions Manual, Vol.1, Chapter
32 Problem 7-1 (concluded) Allowance for uncollectible accounts: Beginning balance $54,000 Add: Monthly bad debt accruals 78,600 Deduct: Write-offs (68,000) Balance before year-end adjustment 64,600 Required allowance (determined above) 68,900 Required year-end increase in allowance $ 4,300 Requirement 3 Bad debt expense for 2006: Monthly accruals $78,600 Year-end adjustment 4,300 Total $82,900 Balance sheet: Current assets: Accounts receivable, net of $68,900 in allowance for uncollectible accounts $574, Intermediate Accounting, 4/e
33 Problem 7-2 Requirement 1 (a) Accounts receivable analysis: Balance, beginning of year ($580, ,590) $ 587,230 Add: Credit sales 2,158,755 Less: Cash collections (2,230,065) Less: Balance end of year ($504, ,042) (509,986) Accounts receivable written off during year $ 5,934 (b) Allowance for uncollectible accounts analysis: Beginning balance $6,590 Less: Write-offs (from above) (5,934) Less: Year-end balance (5,042) Bad debt expense for the current year $4,386 (c) $4,386 of bad debt expense divided by $2,158,755 in credit sales equals.2% (.002). Requirement 2 (a) Current year Previous year Current assets: Receivables $509,986 $587,230 (b) Bad debt expense would be equal to actual receivables written off of $5,934. Solutions Manual, Vol.1, Chapter
34 Problem 7-3 Requirement 1 To record accounts receivable written off during the year Allowance for uncollectible accounts... 35,000 Accounts receivable... 35,000 To record collection of account receivable previously written off. Accounts receivable... 3,000 Allowance for uncollectible accounts... 3,000 Cash... 3,000 Accounts receivable... 3,000 Requirement 2 (a) December 31, 2006 Bad debt expense (3% x $1,750,000)... 52,500 Allowance for uncollectible accounts... 52,500 (b) December 31, 2006 Bad debt expense... 36,700 Allowance for uncollectible accounts (below)... 36, Intermediate Accounting, 4/e
35 Problem 7-3 (continued) Accounts receivable analysis: Beginning balance $ 462,000 Add: Credit sales 1,750,000 Less: Write-offs (35,000) Less: Cash collections (1,830,000) Ending balance $ 347,000 $347,000 x 10% = $34,700 = Required allowance for uncollectible accounts Allowance for uncollectible accounts analysis: Beginning balance $30,000 Add: Collection of receivable previously written off 3,000 Less: Write-offs (35,000) Balance before adjustment (2,000) debit balance Required allowance (determined above) 34,700 Bad debt expense adjustment $36,700 (c) December 31, 2006 Bad debt expense... 37,047 Allowance for uncollectible accounts (below)... 37,047 Required allowance: Age Group Amount Percent uncollectible Estimated allowance 0-60 days $225,550 4% $ 9, days 69,400 15% 10, days 34,700 25% 8,675 Over 120 days 17,350 40% 6,940 Totals $347,000 $35,047 Solutions Manual, Vol.1, Chapter
36 Problem 7-3 (concluded) Allowance for uncollectible accounts analysis: Beginning balance $30,000 Add: Collection of receivable previously written off 3,000 Less: Write-offs (35,000) Balance before adjustment (2,000) debit balance Required allowance 35,047 Bad debt expense adjustment $37,047 Requirement 3 Accounts receivable - Year-end allowance (a) $347,000 - [$(2,000) + 52,500] = $296,500 (b) $347,000-34,700 = $312,300 (c) $347,000-35,047 = $311, Intermediate Accounting, 4/e
37 Problem 7-4 Requirement 1 Total face value of notes = $300, , ,000 = $650,000 Balance sheet carrying value = 645,000 Difference is the remaining discount on note 3 $ 5,000 Note 3 is a 6-month note, with three months remaining. Therefore, $5,000 represents one-half of the total discount of $10,000. $10,000 $200,000 = 5% x 12 / 6 = 10% discount rate. Requirement 2 Total accrued interest receivable $16,000 Less: Interest accrued on note 1: $300,000 x 10% x 4 / 12 = (10,000) Interest accrued on note 2 $ 6,000 $6,000 $150,000 = 4% x 12 / 6 = 8% Requirement 3 Note 1 $10,000 Note 2 6,000 Note 3 ($200,000 x 10% x 3 / 12 ) 5,000 Total interest revenue $21,000 Solutions Manual, Vol.1, Chapter
38 Problem 7-5 Requirement 1 Alternative a: To record the borrowing of $500,000 and signing of a note payable. July 1, 2006 Cash ,000 Note payable ,000 Alternative b: To record the transfer of receivables. July 1, 2006 Cash ($550,000 x 98%) ,000 Loss on transfer of receivables (2% x $550,000)... 11,000 Accounts receivable ,000 Requirement 2 Alternative a: July, 2006 Cash (80% x $780,000) ,000 Accounts receivable ,000 July 31, 2006 Interest expense ($500,000 x 12% x 1 / 12 )... 5,000 Note payable ,000 Cash , Intermediate Accounting, 4/e
39 Problem 7-5 (concluded) Alternative b: The amount collected by the bank in excess of the receivables transferred is remitted to Lonergan. July 31, 2006 Cash [(80% x $780,000) - $550,000]... 74,000 Accounts receivable... 74,000 Requirement 3 Alternative a. Alternative b. Note disclosure is required for the assignment of accounts receivable as collateral for the $500,000 note. No disclosure is required since the transfer of receivables was made without recourse. Problem 7-6 Cash (90% x $800,000) ,000 Loss on sale of receivables (4% x $800,000)... 32,000 Receivable from factor ([10% x $800,000] $32,000 fee)... 48,000 Accounts receivable (balance sold) ,000 Solutions Manual, Vol.1, Chapter
40 Problem 7-7 Requirement 1 February 28, 2006 Note receivable... 10,000 Sales revenue... 10,000 March 31, 2006 Note receivable (face amount)... 8,000 Discount ($8,000 x 10%) Sales revenue (difference)... 7,200 April 3, 2006 Accounts receivable... 7,000 Sales revenue... 7,000 April 11, 2006 Cash (98% x $7,000)... $6,860 Sales discounts (2% x $7,000) Accounts receivable... 7,000 April 17, 2006 Sales returns... 5,000 Accounts receivable... 5,000 Inventory... 3,200 Cost of goods sold... 3, Intermediate Accounting, 4/e
41 Problem 7-7 (continued) April 30, 2006 Cash (99% x $50,000)... 49,500 Loss on sale of receivables (1% x $50,000) Accounts receivable... 50,000 To accrue interest on note receivable for four months. June 30, 2006 Interest receivable Interest revenue ($10,000 x 10% x 4 / 12 ) To record discounting of note receivable. June 30, 2006 Cash (proceeds determined below)... 10,266 Loss on sale of note receivable (difference) Interest receivable (from adjusting entry) Note receivable (face amount)... 10,000 $10,000 Face amount 583 Interest to maturity ($10,000 x 10% x 7 / 12 ) 10,583 Maturity value (317) Discount ($10,583 x 12% x 3 / 12 ) $10,266 Cash proceeds August 31, 2006 NO ENTRY REQUIRED Solutions Manual, Vol.1, Chapter
42 Problem 7-7 (concluded) Requirement 2 To accrue nine months' interest on the Maddox Co. note receivable. Discount Interest revenue ($8,000 x 10% x 9 / 12 ) Requirement 3 Income Date increase (decrease) February 28 $10,000 March 31 7,200 April 3 7,000 April 11 (140) April 17 (5,000) April 17 3,200 April 30 (500) June June 30 (67) December Total effect $22, Intermediate Accounting, 4/e
43 Problem 7-8 Note Note Face Value Date of Note Interest Rate Date Discounted Discount Rate Proceeds Received 1 $50, % % $50,350 (1) 2 50, % % 51,675 (2) 3 50, % % 51,410 (3) 4 80, % % 81,027 (4) 5 80, % % 80,752 (5) 6 80, % % 81,713 (6) (1) $50,000 Face amount 3,000 Interest to maturity ($50,000 x 8% x 9 / 12 ) 53,000 Maturity value (2,650) Discount ($53,000 x 10% x 6 / 12 ) $50,350 Cash proceeds (2) $50,000 Face amount 3,000 Interest to maturity ($50,000 x 8% x 9 / 12 ) 53,000 Maturity value (1,325) Discount ($53,000 x 10% x 3 / 12 ) $51,675 Cash proceeds Solutions Manual, Vol.1, Chapter
44 Problem 7-8 (concluded) (3) $50,000 Face amount 3,000 Interest to maturity ($50,000 x 8% x 9 / 12 ) 53,000 Maturity value (1,590) Discount ($53,000 x 12% x 3 / 12 ) $51,410 Cash proceeds (4) $80,000 Face amount 2,400 Interest to maturity ($80,000 x 6% x 6 / 12 ) 82,400 Maturity value (1,373) Discount ($82,400 x 10% x 2 / 12 ) $81,027 Cash proceeds (5) $80,000 Face amount 2,400 Interest to maturity ($80,000 x 6% x 6 / 12 ) 82,400 Maturity value (1,648) Discount ($82,400 x 12% x 2 / 12 ) $80,752 Cash proceeds (6) $80,000 Face amount 2,400 Interest to maturity ($80,000 x 6% x 6 / 12 ) 82,400 Maturity value (687) Discount ($82,400 x 10% x 1 / 12 ) $81,713 Cash proceeds 7-44 Intermediate Accounting, 4/e
45 Problem 7-9 Requirement 1 Computation of balance per books: Balance per bank statement $14, Add: Deposits outstanding Deduct: Checks outstanding (1,320.25) Error in recording rent check (18.00) Add: Automatic mortgage payment Add: Bank service charges Deduct: Deposit credit to company s account in error (875.00) Add: NSF check charge Balance per books $13, Step 1: Bank Balance to Corrected Balance Balance per bank statement $14, Add: Deposits outstanding Deduct: Bank error - deposit incorrectly credited to company account (875.00) Checks outstanding (1,320.25) Corrected cash balance $13, Step 2: Book Balance to Corrected Balance Balance per books $13, Add: Error in recording rent check Deduct: Automatic mortgage note payment (450.00) Service charges (14.00) NSF checks (85.00) Corrected cash balance $13, Solutions Manual, Vol.1, Chapter
46 Problem 7-9 (concluded) Requirement 2 To correct error in recording cash disbursement for rent. Cash Rent expense To record credits to cash revealed by the bank reconciliation. Interest expense Mortgage note payable Miscellaneous expense (bank service charges). 14 Accounts receivable (NSF checks) Cash Requirement 3 Checking account balance $13, Petty cash U.S. treasury bills 5, Total cash and cash equivalents $18, Problem 7-10 Requirement 1 Step 1: Bank Balance to Corrected Balance Step 2: Balance per bank statement $3,851 Add: Deposits outstanding 2,150 (1) Deduct: Bank error - deposit incorrectly credited to company account (1,300) Outstanding checks (831) (2) Corrected cash balance $3,870 Book Balance to Corrected Balance 7-46 Intermediate Accounting, 4/e Balance per books $4,422 Deduct: Error in recording check #411 (90) Service charges (22)
47 Problem 7-10 (concluded) Requirement 2 To record credits to cash revealed by the bank reconciliation. Advertising expense Miscellaneous expense (bank service charges). 22 Accounts receivable (NSF checks) Cash Solutions Manual, Vol.1, Chapter
48 CASES Judgment Case 7-1 Requirement 1 To account for the accounts receivable factored on April 1, 2006, Magrath should decrease accounts receivable by the amount of accounts receivable factored, increase cash by the amount received from the factor, and record a loss equal to the difference. The loss should be reported in the income statement. Factoring of accounts receivable without recourse is equivalent to a sale. Requirement 2 Magrath should account for the collection of the accounts previously written off as uncollectible as follows: Increase both accounts receivable and the allowance for uncollectible accounts. Increase cash and decrease accounts receivable. Requirement 3 One approach estimates uncollectible accounts based on credit sales. This approach focuses on income determination by attempting to match uncollectible accounts expense with the revenues generated. The other approach estimates uncollectible accounts based on the balance in receivables or on an aging of receivables. The approach focuses on asset valuation by attempting to report receivables at realizable value Intermediate Accounting, 4/e
49 Communication Case 7-2 Suggested Grading Concepts and Grading Scheme: Content (70%) 40 Explains the difference between the allowance method and the direct write-off method. Direct write-off more objective. Direct write-off has potential to violate the matching principle. 15 Even if uncollectibles are fairly stable, when significant variations do occur, profit will be overstated in one period and understated in another period. 15 Even if uncollectibles remain constant, the direct write-off method will result in an overstatement of accounts receivable on the balance sheet. 70 points Writing (30%) 6 Terminology and tone appropriate to the audience of a company president. 12 Organization permits ease of understanding. Introduction that states purpose. Paragraphs that separate main points. 12 English Sentences grammatically clear and well organized, concise. Word selection. Spelling. Grammar and punctuation. 30 points Solutions Manual, Vol.1, Chapter
50 Judgment Case 7-3 Requirement 1 a. Hogan should account for the sales discounts at the date of sale using the net method by recording accounts receivable and sales revenue at the amount of sales less the sales discounts available. Revenues should be recorded at the cash equivalent price at the date of sale. Under the net method, the sale is recorded at an amount that represents the cash equivalent price at the date of exchange (sale). b. There is no effect on Hogan s sales revenues when customers do not take the sales discounts. Hogan s net income is increased by the amount of interest earned when customers do not take the sales discounts. Requirement 2 Trade discounts are neither recorded in the accounts nor reported in the financial statements. Therefore, the amount recorded as sales revenues and accounts receivable is net of trade discounts and represents the cash equivalent price of the asset sold. Requirement 3 To account for the accounts receivable factored on August 1, 2006, Hogan should decrease accounts receivable by the amount of the accounts receivable factored, increase cash by the amount received from the factor, and record a loss. Factoring of accounts receivable without recourse is equivalent to a sale. The difference between the cash received and the carrying amount of the receivables is a loss. Requirement 4 Hogan should report the face amount of the interest-bearing notes receivable and the related interest receivable for the period from October 1 through December 31 on its balance sheet as current assets. Both assets are due on September 30, 2007, which is less than one year from the date of the balance sheet. Hogan should report interest revenue from the notes receivable on its income statement for the year ended December 31, Interest revenue is equal to the amount accrued on the notes receivable at the appropriate interest rate. Interest revenue is realized with the passage of time. Accordingly, interest revenue should be accounted for as an element of income over the life of the notes receivable Intermediate Accounting, 4/e
51 Ethics Case 7-4 Requirement 1 Required allowance $180,000 Revised allowance 135,000 Increase in income before taxes of proposed change $ 45,000 Requirement 2 Discussion should include these elements. Ethical Dilemma: You as the assistant controller have a responsibility to follow GAAP and make a reasonably accurate estimate of the net realizable value of receivables. Is your responsibility to fairly present Stanton Industries' financial statements to external users greater than your obligation to improve the financial position of your employer? Alternative actions and consequences include: 1. Refuse to comply with the controller's request to change the aging category of the large account. Positive consequences: a. Preservation of your honesty and integrity. b. Fair presentation of the net realizable value of receivables. Negative consequences: a. Possible loss of your job. b. Lower net income for Stanton Industries. c. A devalued stock price for Stanton Industries. 2. Comply with the controller's suggestion to report the allowance for uncollectible accounts at $135,000. Positive consequences: a. Retention of your job. b. A more favorable net income for Stanton Industries. c. A more favorable position with unknowing creditors, financial analysts, current investors, and future investors. Negative consequences: a. Endure guilt feelings. b. A lack of trust in you by other managers and employees. c. Possible litigation from investors and creditors. Solutions Manual, Vol.1, Chapter
52 Case 7-4 (concluded) 3. Report the controller's suggestion to a higher level of management, the audit committee, or the auditors. If one of these parties corrects the controller and compels fair reporting of the allowance account, the consequences would be the same as in alternative 1 when you refuse to make the adjustment. Your job may still be in jeopardy due to the fact that management may consider whistle blowing as indicative of employee disloyalty. If the reportee parties agree with the controller and report the incorrect amount of $135,000, the consequences will be similar to those for the second alternative in 2, except that you run an even greater risk of losing your job. 4. Refuse to comply with the controller's request and resign as assistant controller. If you report the controller's suggestion to higher management, the audit committee, or the auditor, the positive and negative considerations are the same as for alternative 3. If you do not report the controller's request, then the consequences are the same as for alternative 2. In either case your job is not an issue since you have already resigned Intermediate Accounting, 4/e
53 Judgment Case A weakness is created by the fact that John need only submit a list of accounts and amounts to be charged to replenish the petty cash fund. The supporting documentation for the petty cash disbursements also should be submitted with John s list and reviewed by someone else. Surprise counts of the fund also should be made to ensure that the fund is being maintained on an imprest basis, that is, to ensure that cash and/or receipts equal $200 at all times. 2. The internal control system for disbursements does not contain sufficient separation of duties. Dean Leiser approves the vouchers, signs the checks, maintains the disbursement records, and reconciles the bank account. There should be at least one other person involved in these activities to ensure accuracy and to safeguard cash from expropriation. 3. The internal control system for receipts does not contain sufficient separation of duties. Fran Jones has physical control of the deposits and also maintains the subsidiary ledger for accounts receivable. These duties should be separated. In addition, the company should require that customers pay their bills via check and that cash not be used. Solutions Manual, Vol.1, Chapter
54 Real World Case 7-6 Requirement ($ in thousands) Accounts receivable, net $19,804 $22,712 Add: Allowances Accounts receivable, gross $20,500 $23,689 Requirement 2 ($ in thousands) The answers to this question require an analysis of both accounts receivable and the allowance for uncollectible accounts for First of all, 2004 sales of $196,338 plus the decrease in receivables reported in the statement of cash flows indicates cash received from customers of $199,246 ($196, ,908). Analysis of accounts receivable ($ in thousands) Beginning accounts receivable $ 23,689 Add: Credit sales 196,338 Less: Cash collections (199,246) Less: Write-offs? Ending accounts receivable $ 20,500 Therefore, bad debt write-offs must have been $281. ($23, , ,246 20,500 = $281) Analysis of allowance for uncollectible accounts Beginning allowance $977 Add: Bad debt expense? Less: Write-offs (281) Ending allowance $696 Therefore, bad debt expense must have been $0, indicating that the allowance account from prior years was sufficient to cover future anticipated write-offs on yearend accounts receivable. ($ = $0) 7-54 Intermediate Accounting, 4/e
55 Real World Case 7-7 Requirement 3 Answers will, of course, vary. The following were reported in the financial statements for the year ended December 31, 2003 ($ in millions): a. Net trade accounts receivable + Allowance for doubtful accounts = Gross accounts receivable $ = $662.9 b. The statement of cash flows indicates bad debt expense (provision for doubtful accounts) of $124.8 c. Beginning allowance for doubtful accounts + Bad debt expense - Bad debt write-offs = Ending allowance for doubtful accounts $ Write-offs = $63.1 Write-offs = $111.2 d. Beginning trade accounts receivable + Credit sales - Bad debt write-offs - Cash collected = Ending trade accounts receivable Beginning trade accounts receivable = $ = $604.9 $ , Cash collections = $662.9 Cash collections = $6,635.4 Integrating Case 7-8 McLaughlin's underestimation of bad debts is treated as a change in accounting estimate. Changes in estimates are accounted for prospectively. When a company revises a previous estimate, prior financial statements are not restated. Instead, the company merely incorporates the new estimate in any related accounting determinations from then on. In this case, bad debt expense for 2007 will be higher than it would have been had not the underestimation occurred. A disclosure note should describe the effect of a change in estimate on income before extraordinary items, net income, and related per-share amounts for Solutions Manual, Vol.1, Chapter
56 Analysis Case 7-9 Requirement 1 These methods can be described by one of two basic arrangements: 1. A secured borrowing, or 2. A sale of receivables. When a company chooses between a borrowing and a sale, the critical element is the extent to which it (the transferor) is willing to surrender control over the assets transferred. Specifically, the transferor is determined to have surrendered control over the receivables if and only if three sale conditions are met. Secured borrowings usually take the form of an assignment of receivables. An assignment of receivables is a promise by the borrower (the owner of the receivables) that any failure to repay debt owed to the lender in accordance with the debt agreement, will cause the proceeds from collecting the receivables to go directly toward repayment of the debt. This arrangement is no different from the use of a building as collateral for a mortgage loan. The assignor (borrower) assigns the assignee (lender) the rights to specific receivables as collateral for a loan. A variation of assigning specific receivables is when trade receivables in general rather than specific receivables are pledged as collateral. The responsibility of collection of the receivables remains solely with the company. This variation is referred to as a pledging of accounts receivable. Two popular arrangements used for the sale of receivables are factoring and securitization. A factor is a financial institution that buys receivables for cash, handles the billing and collection of the receivables, and charges a fee for this service. Actually, credit cards like VISA and Mastercard are forms of factoring arrangements. The seller relinquishes all rights to the future cash receipts in exchange for cash from the buyer (the factor). Another popular arrangement used to sell receivables is a securitization. In a typical accounts receivable securitization, the company creates a Special Purpose Entity (SPE), usually a trust or a subsidiary. The SPE buys a pool of trade receivables, credit card receivables, or loans from the company, and then sells related securities, for example bonds or commercial paper, that are backed (collateralized) by the receivables. Similar to accounts receivable, a note receivable can be used to obtain immediate cash from a financial institution either by pledging the note as collateral for a loan or by selling the note. The transfer of a note is referred to as discounting Intermediate Accounting, 4/e
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
More informationCHAPTER 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
More informationUnit 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;
More informationBUS312A/612A Financial Reporting I. Homework 10.6.2014 & 10.8.2014 Receivables Chapter 7
BUS312A/612A Financial Reporting I Homework 10.6.2014 & 10.8.2014 Receivables Chapter 7 Chapter 7- You should be able to: Identify elements of cash Identify the types of receivables Explain accounting
More informationChapter 07 - Accounts and Notes Receivable. Chapter Outline
Chapter 07 - Accounts and Receivable I. Accounts Receivable A receivable is an amount due from another party. Accounts Receivable are amounts due from customers for credit sales. A. Recognizing Accounts
More informationWalk Through Balance Sheet. Chapter 7. Learning Objectives. Learning Objectives 1, 2. Learning Objectives 1, 2. Cash and Receivables.
Chapter 7 Walk Through Balance Sheet Cash and Receivables Chapters 1 6 Accounting cycle: JE, AJE, financial stmts Conceptual framework, GAAP, revenue Time value of money concepts Remaining chapters (ACTG
More informationCHAPTER 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
More informationSample 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
More informationASSETS. Are cash and other Assets expected to be converted into cash, either in One Year or in the operating cycle, which ever is longer.
ASSETS Current Assets: Are cash and other Assets expected to be converted into cash, either in One Year or in the operating cycle, which ever is longer. sold, or consumed funds. : It is the money on deposit
More informationBUS312A/612A Financial Reporting I. Homework 10.6.2014 & 10.8.2014 Receivables Chapter 7
BUS312A/612A Financial Reporting I Homework 10.6.2014 & 10.8.2014 Receivables Chapter 7 Chapter 7- You should be able to: Identify elements of cash Identify the types of receivables Explain accounting
More informationAccounting 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
More informationCHAPTER 7. Cash and Receivables 1 1, 2 1 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 20, 22, 23, 24 17, 18, 19 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, 22, 23, 24 1
More informationACCOUNT 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
More informationAnalyzing the Statement of Cash Flows
Analyzing the Statement of Cash Flows Operating Activities NACM Upstate New York Credit Conference 2015 By Ron Sereika, CCE,CEW NACM 1 Objectives of this Educational Session u Show how the statement of
More informationCash 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
More informationShort-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.
More informationAccounting for and Presentation of Current Assets. is used to purchase finished goods or raw materials and labor used to manufacture
CHAPTER 5 Accounting for and Presentation of Current Assets Current assets include cash and those assets that are expected to be converted to cash or used up within one year, or an operating cycle, whichever
More informationFinancial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises
Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises Exercises E17-1. Determining cash flows from operations Using the indirect method, cash flow from operations is computed
More informationAccounting 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
More informationInvestments 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
More informationModule 6: Internal control and accounting for cash, investments held for the short term, and receivables
Page 1 of 40 Module 6: Internal control and accounting for cash, investments held for the short term, and receivables Overview In previous modules, you studied the steps in the accounting cycle of service
More informationChapter 7: Cash & Receivables L7 (pg 399 436)
Chapter 7: Cash & Receivables L7 (pg 399 436) UNDERSTANDING CASH AND ACCOUNTS RECEIVABLE How Do Companies Manage and Control Cash? Cash flow budgets help anticipate cash needs and minimize borrowing requirements
More informationCHAPTER 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
More informationCONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended June 30, 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended June 30, 2002 Unaudited Unaudited Note Turnover 2 5,576 5,803 Other net losses (1) (39) 5,575 5,764 Direct costs and operating expenses (1,910)
More informationTo 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
More information10-1. Auditing Business Process. Objectives Understand the Auditing of the Enteties Business. Process
10-1 Auditing Business Process Auditing Business Process Objectives Understand the Auditing of the Enteties Business Process Identify the types of transactions in different Business Process Asses Control
More information128 SU 3: Financial Accounting I
128 SU 3: Financial Accounting I 3.5 FINANCIAL ASSETS AND LIABILITIES Definitions 1. Financial assets include cash, equity instruments of other entities (e.g., preference shares), contract rights to receive
More informationThe Statement of Cash Flows
CHAPTER The Statement of Cash Flows OBJECTIVES After careful study of this chapter, you will be able to: 1. Define operating, investing, and financing activities. 2. Know the categories of inflows and
More informationIndian Accounting Standard (Ind AS) 7 Statement of Cash Flows
Contents Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows Paragraphs OBJECTIVE SCOPE 1 3 BENEFITS OF CASH FLOW INFORMATION 4 5 DEFINITIONS 6 9 Cash and cash equivalents 7 9 PRESENTATION OF
More informationPivotal 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
More informationGlossary of Accounting Terms
Glossary of Accounting Terms Account - Something to which transactions are assigned. Accounts in MYOB are in one of eight categories: Asset Liability Equity Income Cost of sales Expense Other income Other
More informationAccounting Norms and Principles January 7, 2003
1 Accounting Norms and Principles January 7, 2003 The purpose of an accounting system is to provide credit union management with complete and accurate financial information that can be used to operate
More informationSri Lanka Accounting Standard-LKAS 7. Statement of Cash Flows
Sri Lanka Accounting Standard-LKAS 7 Statement of Cash Flows CONTENTS SRI LANKA ACCOUNTING STANDARD-LKAS 7 STATEMENT OF CASH FLOWS paragraphs OBJECTIVE SCOPE 1 3 BENEFITS OF CASH FLOW INFORMATION 4 5 DEFINITIONS
More informationStatement of Cash Flows: Reporting and Analysis
Statement of Cash Flows: Reporting and Analysis Statement of Cash Flows: Reporting and Analysis Copyright 2014 by DELTACPE LLC All rights reserved. No part of this course may be reproduced in any form
More informationThe 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
More informationB Exercises 4-1. (d) Intangible assets. (i) Paid-in capital in excess of par.
B Exercises E4-1B (Balance Sheet Classifications) Presented below are a number of balance sheet accounts of Castillo Inc. (a) Trading Securities. (h) Warehouse in Process of Construction. (b) Work in Process.
More informationC. Valuing Accounts Receivable.
C. Valuing Accounts Receivable. 1. Valuing receivables involves reporting them at their cash (net) realizable value. Cash (net) realizable value is the net amount expected to be received in cash. 2. Uncollectible
More informationGlossary of Accounting Terms Peter Baskerville
Glossary of Accounting Terms Peter Baskerville Account for or 'bring to account': An accounting phrase used to describe the recording of a financial transaction that is required under the generally accepted
More informationRAPID REVIEW Chapter Content
RAPID REVIEW BASIC ACCOUNTING EQUATION (Chapter 2) INVENTORY (Chapters 5 and 6) Basic Equation Assets Owner s Equity Expanded Owner s Owner s Assets Equation = Liabilities Capital Drawing Revenues Debit
More information2. The balance in a deferred revenue account represents an amount that is Earned Collected a. Yes Yes b. Yes No c. No Yes d. No No.
Multiple choice (36%, 2%each): 1. Failure to record the expired amount of prepaid rent expense would not a. understate expense. b. overstate net income. c. overstate owners' equity. d. understate liabilities.
More information1. Analyze the following T-account in the ledger of Moxy Pool Supply Company
Name: Date: 1. Analyze the following T-account in the ledger of Moxy Pool Supply Company Mdse. Inventory 5,000 400 If $5,000 in the Inventory account represents merchandise purchased from a supplier, we
More informationTABLE OF CONTENTS CHAPTER 9
TABLE OF CONTENTS CHAPTER 9 Purpose...1 Balance Sheet Accounts...1 Assets...1 Cash...1 Accounts Receivable...2 Accounts Receivable Allowances...4 Loans and Notes Receivable...4 Loans and Notes Allowances...5
More informationPROFESSOR S NAME ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8)
COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) Page 137 NAME ANSWER KEY PROFESSOR S NAME SECTION SCORE ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) INSTRUCTIONS: COMPLETE ALL
More informationFinancial Statement and Cash Flow Analysis
Chapter 2 Financial Statement and Cash Flow Analysis Answers to Concept Review Questions 1. What role do the FASB and SEC play with regard to GAAP? The FASB is a nongovernmental, professional standards
More informationStormGeo, Inc. and Subsidiary Consolidated Financial Statements December 31, 2012 StormGeo, Inc. and Subsidiary December 31, 2012 Table of Contents Page Independent Auditors Report... 1-2 Consolidated
More informationSAMPLE 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.
More informationFinancial Accounting. John J. Wild. Sixth Edition. McGraw-Hill/Irwin. Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Financial Accounting John J. Wild Sixth Edition McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 06 Reporting and Analyzing Cash and Internal Controls Conceptual
More informationWEEK 6. Objective 1: Sales Transaction Cycle Risks
WEEK 6 CSA ch4 & GS ch10: pp457-488 Objective 1: Sales Transaction Cycle Risks The major assertions of interest to the auditor in ST of balances for account receivable are existence and valuation and allocation.
More informationwww.cebu-cpar.com CEBU CPAR CENTER, INC. AUDIT OF CASH AND CASH EQUIVALENTS
AUDIT OF CASH AND CASH EQUIVALENTS PROBLEM NO. 1 In connection with your audit of Caloocan Corporation for the year ended December 31, 2006, you gathered the following: 1. Current account at Metrobank
More informationNEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS
NAS 03 NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS CONTENTS Paragraphs OBJECTIVE SCOPE 1-3 BENEFITS OF CASH FLOWS INFORMATION 4-5 DEFINITIONS 6-9 Cash and cash equivalents 7-9 PRESENTATION OF A
More informationLPFA Taxable Student Loan Backed Bonds Series 2011A - FFELP 2016 Annual Disclosure Report to Investors (All Information is as of 03/31/2016)
LPFA Taxable Student Loan Backed Bonds Series 2011A - FFELP 2016 Annual Disclosure Report to Investors (All Information is as of 03/31/2016) CHARACTERISTICS OF THE FINANCED STUDENT LOANS As of March 31,
More information9. Short-Term Liquidity Analysis. Operating Cash Conversion Cycle
9. Short-Term Liquidity Analysis. Operating Cash Conversion Cycle 9.1 Current Assets and 9.1.1 Cash A firm should maintain as little cash as possible, because cash is a nonproductive asset. It earns no
More informationFinancial Accounting: Assets FA 2 Module 6. Handouts. Current financial assets And current liabilities. Presented by: Laura Dallas, CGA
Accounting: Assets FA 2 Module 6 Handouts Current financial assets And current liabilities Presented by: Laura Dallas, CGA Note: this information is prepared from the best information I have available
More information18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS
APPROVED by Resolution No. 11 of 27 October 2004 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS
More informationExam 3 Review. FV = PV (1 + i) n. Format. What to Bring/Remember. Time Value of Money. Solving for Other Variables Example. Solving for Other Values
Format Exam 3 Review http://fates.cns.muskingum.edu/~ plaube/acct301/default.htm 15 questions Multiple choice (12) Essay (2) Problem (1) What to Bring/Remember What to bring Calculator I ll bring scrap
More informationAccounting 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
More informationSUMITOMO DENSETSU CO., LTD. AND SUBSIDIARIES. Consolidated Financial Statements
SUMITOMO DENSETSU CO., LTD. AND SUBSIDIARIES Consolidated Financial Statements Report of Independent Public Accountants To the Board of Directors of Sumitomo Densetsu Co., Ltd. : We have audited the consolidated
More informationChapter 10. Learning Objectives. Receivables. Receivables. Horngren, Best, Fraser, Willett: Accounting 6e 2010 Pearson Australia
PowerPoint to accompany Chapter 10 Receivables Learning Objectives 1. Design internal controls for receivables 2. Use the allowance method to account for bad debts 3. Use the direct write-off method to
More informationFinancial 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
More informationCHAPTER 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
More informationC02-Fundamentals of financial accounting
Sample Exam Paper Question 1 The difference between an income statement and an income and expenditure account is that: A. An income and expenditure account is an international term for an Income statement.
More informationChapter 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
More informationKOREAN AIR LINES CO., LTD. AND SUBSIDIARIES. Consolidated Financial Statements
Consolidated Financial Statements December 31, 2015 (With Independent Auditors Report Thereon) Contents Page Independent Auditors Report 1 Consolidated Statements of Financial Position 3 Consolidated Statements
More informationInvestments and advances... 313,669
Consolidated Financial Statements of the Company The consolidated balance sheet, statement of income, and statement of equity of the Company are as follows. Please note the Company s consolidated financial
More informationCONNEXUS 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
More informationCHAPTER 23. Statement of Cash Flows 1, 2, 7, 8, 12 3, 4, 5, 6, 16, 17, 19 9, 20 4, 5, 9, 10, 11 10, 13, 15, 16. 7. Worksheet adjustments.
CHAPTER 23 Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Format, objectives purpose, and source of statement.
More informationChapter 13 Financial Statements and Closing Procedures
Chapter 13 - Financial Statements and Closing Procedures Chapter 13 Financial Statements and Closing Procedures TEACHING OBJECTIVES 13-1) Prepare a classified income statement from the worksheet. 13-2)
More informationUnderstanding Cash Flow Statements
Understanding Cash Flow Statements 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Components and Format of the Cash Flow Statement... 3 3. The
More informationACCT 335 Chapter 7 Pre-Assigned Problems Suggested Solutions
ACCT 335 Chapter 7 Pre-Assigned Problems Suggested Solutions PROBLEM 7-2 (a) Sales $1,980,000 Sales discounts 4,400 Sales returns and allowances 60,000 Net sales 1,915,600 Percentage 1 1/2% Bad debt expense
More informationMARK SCHEME for the October/November 2014 series 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120
CAMBRIDGE INTERNATIONAL EXAMINATIONS Cambridge International General Certificate of Secondary Education MARK SCHEME for the October/November series 0452 ACCOUNTING 0452/23 Paper 2, maximum raw mark 120
More informationReceivables QUIZ AND TEST HINTS
C H A P T E R 9 Receivables QUIZ AND TEST HINTS The following hints may be helpful to you in preparing for a quiz or a test over the material covered in Chapter 9. 1. You should be able to prepare journal
More information3 4 5 6 FINANCIAL SECTION Five-Year Summary (Consolidated) TSUKISHIMA KIKAI CO., LTD. and its consolidated subsidiaries Years ended March 31 (Note 1) 2005 2004 2003 2002 2001 2005 For the year: Net sales...
More informationAppendix 16: Chart of Accounts for Small Business Investment Companies
Appendix 16: Chart of Accounts for Small Business Investment Companies 10 06 A A. Account Numbering System. This system provides for two-digit number designations for major categories under which accounts
More informationAccounting for Health Care Organizations. Chapter 13
Accounting for Health Care Organizations Chapter 13 Learning Objectives Account for unique hospital revenue sources Prepare journal entries for hospital transactions Prepare government hospital financial
More informationCHAPTER 9 ACCOUNTING FOR RECEIVABLES
CHAPTER 9 ACCOUNTING FOR RECEIVABLES LEARNING OBJECTIVES 1. IDENTIFY THE DIFFERENT TYPES OF RECEIVABLES. 2. EXPLAIN HOW COMPANIES RECOGNIZE ACCOUNTS RECEIVABLE. 3. DISTINGUISH BETWEEN THE METHODS AND BASES
More informationPrinciples of Financial Accounting ACC-101-TE. TECEP Test Description
Principles of Financial Accounting ACC-101-TE TECEP Test Description This TECEP is an introduction to the field of financial accounting. It covers the accounting cycle, merchandising concerns, and financial
More informationLarge Company Limited. Report and Accounts. 31 December 2009
Registered number 123456 Large Company Limited Report and Accounts 31 December 2009 Report and accounts Contents Page Company information 1 Directors' report 2 Statement of directors' responsibilities
More informationACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING
ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING COURSE DESCRIPTION: Prerequisites ENG 090, and RED 090 or DRE 098; MAT 070 or DMA 010, 020, 030, 040, or satisfactory score on placement test Corequisites: None
More informationCurrent assets. assets that are expected to be converted into cash within one year or within the operating cycle of an entity
CHAPTER 7 Current assets assets that are expected to be converted into cash within one year or within the operating cycle of an entity Chapter 7 Mugan-Akman 2007 2-40 Current Asset Section of a Balance
More informationUnderstanding Financial Statements. For Your Business
Understanding Financial Statements For Your Business Disclaimer The information provided is for informational purposes only, does not constitute legal advice or create an attorney-client relationship,
More informationFinancial Transactions and Fraud Schemes
Financial Transactions and Fraud Schemes Accounting Concepts 2013 Association of Certified Fraud Examiners, Inc. Accounting Basics Assets = Liabilities + Owners Equity Accounting Basics By definition,
More informationACCOUNTING 105 CONCEPTS REVIEW
ACCOUNTING 105 CONCEPTS REVIEW A note from the tutors: This handout is designed to help you review important information as you study for your cumulative final exam. While it does cover many important
More information(a) Accounts Receivable... 23,000 Sales Revenue... 23,000. (b) Sales Returns and Allowances... 2,400 Accounts Receivable... 2,400
BRIEF EXERCISE 8-1 (a) Other receivables. (b) Notes receivable. (c) Accounts receivable. BRIEF EXERCISE 8-2 (a) Accounts Receivable... 23,000 Sales Revenue... 23,000 (b) Sales Returns and Allowances...
More informationChapter 21 The Statement of Cash Flows Revisited
Chapter 21 The Statement of Cash Flows Revisited AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments,
More informationAccounting 500 4A Balance Sheet Page 1
Accounting 500 4A Balance Sheet Page 1 I. PURPOSE A. The Balance Sheet shows the financial position of the company at a specific point in time (a date) 1. This differs from the Income Statement which measures
More informationREVIEW FOR EXAM NO. 3, ACCT-2301 (SAC) (Chapters 7-9)
REVIEW FOR EXAM NO. 3, ACCT-2301 (SAC) (Chapters 7-9) A. Chapter 7. 1. Internal Control Objectives. a. Safeguards to protect assets. b. Procedures to insure reliable financial reports. c. Methods to insure
More informationwww.cebu-cpar.com Based on the above and the result of your audit, determine the adjusted balance of following:
CEBU CPAR CENTER, INC. AUDIT OF RECEIVABLES PROBLEM NO. 1 Your audit disclosed that on December 31, 2006, the accounts receivable control account of Alilem Company had a balance of P2,865,000. An analysis
More informationAccounts Payable are the total amounts your business owes its suppliers for goods and services purchased.
Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold
More informationChapter 8. Reporting and Analyzing Receivables. Study Objectives
Reporting and Analyzing Receivables Study Objectives Identify the different types of receivables. Explain how accounts receivable are recognized in the accounts. Describe the methods used to account for
More informationSales and Accounts Receivable. Reporting and Analyzing Receivables. Study Objectives
Reporting and Analyzing Receivables Study Objectives Identify the different types of receivables. Explain how accounts receivable are recognized in the accounts. Describe the methods used to account for
More informationStatement of Cash Flows
STATUTORY BOARD FINANCIAL REPORTING STANDARD SB-FRS 7 Statement of Cash Flows This version of SB-FRS 7 does not include amendments that are effective for annual periods beginning after 1 January 2014.
More informationSOS CHILDREN S VILLAGES USA, INC.
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS DECEMBER 31, 2014 AND 2013 TABLE OF CONTENTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1-2 Page FINANCIAL STATEMENTS
More informationLCGI 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
More informationEquity The remainder is the shareholders claim on the assets-equity. It is often referred to as residual equity.
ACT 1600 Fundamental of Financial Accounting Chapter 1 The Basic Accounting Equation Asset = Liabilities + Equity Asset Assets are resources a business owns. The common characteristic possessed by all
More informationSOS CHILDREN S VILLAGES USA, INC.
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS DECEMBER 31, 2015 AND 2014 TABLE OF CONTENTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1-2 Page FINANCIAL STATEMENTS
More information1. This exam contains 12 pages. Please make sure your copy is not missing any pages.
Name Solution Key Section ACCOUNTING 15.501 SPRING 2003 FINAL EXAM EXAM GUIDELINES 1. This exam contains 12 pages. Please make sure your copy is not missing any pages. 2. The exam must be completed within
More informationControlling and Reporting Cash
Controlling and Reporting Cash Essential Principles for Safeguarding Cash and Reporting It On Financial Statements Gregory Mostyn, CPA Worthy and James Publishing www.worthyjames.com Controlling and Reporting
More informationShort-Term Investments & Receivables. Pr. Zoubida SAMLAL
Short-Term Investments & Receivables Pr. Zoubida SAMLAL Learning Objective 1 Account for short-term investments Account for short-term investments Accounting for Short-Term Investments Also called marketable
More information