Beruflich Dokumente
Kultur Dokumente
Chapter
Chapter 7-1
Receivables
Claims held against customers and others for money, goods, or services. Oral promises of the purchaser to pay for goods and services sold. Written promises to pay a sum of money on a specified future date.
Accounts Receivable
Notes Receivable
Chapter 7-2
Receivables
Nontrade Receivables
Examples:
1.
2. Advances to subsidiaries.
Chapter 7-3
Chapter 7-4
Chapter 7-5
Chapter 7-6
Chapter 7-7
Chapter 7-8
Chapter 7-9
Chapter 7-10
Percentage of Receivables
Focus on Net Realizable Value
Chapter 7-12
Allowance for Doubtful Accounts: Case 1 $150 (credit balance) Case 2 $150 (debit balance)
Chapter 7-13
Estimated percentage
Desired balance
x
$
8%
5,800
===================================================
What should the ending balance be for the allowance account? -- Case 1 and Case 2
Chapter 7-14
Chapter 7-15
Chapter 7-16
10
Chapter 7-18
Chapter 7-19
P7- 2
Chapter 7-20
Chapter 7-21
0
Chapter 7-23
Chapter 7-24
Chapter 7-25
Zero-Interest-Bearing Note
Exercise Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note. The market rate of interest for a note of similar risk is 6 percent. How does Balance Bar record the receipt of the note?
$100,000 $0 0 0 0 0
0
Chapter 7-26
Zero-Interest-Bearing Note
Amortization Schedule Non-Interest-Bearing Note
6% Interest Revenue Carrying Amount of Note $ 74,726
Cash Received Date of issue End of yr. 1 End of yr. 2 End of yr. 3 End of yr. 4 End of yr. 5
Discount Amortized
94,340 100,000
Chapter 7-27
Zero-Interest-Bearing Note
Journal Entries for Non-Interest-Bearing note Record issuance of note receivable:
Chapter 7-28
Interest-Bearing Note
Exercise Balance Bar Co. made a loan to Bio Foods and received in exchange a 5-year, $100,000 note bearing interest 10 percent. The market rate of interest for a note of similar risk is 8 percent. How does Balance Bar record the receipt of the note? Present value of Principle:
$100,000 (PVF5, 8%) = $100,000 x .68058 = $ 68,058 39,927
$ 107,985
Interest-Bearing Note
Amortization Schedule Interest-Bearing Note
8% Interest Revenue $ 8,639 8,530 8,412 8,285 8,148 42,014 Carrying Amount of Note $ 107,985 106,624 105,154 103,566 101,851 100,000
Cash Received Date of issue End of yr. 1 End of yr. 2 End of yr. 3 End of yr. 4 End of yr. 5 10,000 10,000 10,000 10,000 10,000 50,000
Chapter 7-30
Interest-Bearing Note
Journal Entries for Interest-Bearing Note
Date Account Title Premium on notes receivable Cash Dec. yr. 1 Cash Premium on notes receivable Interest revenue ($107,985 x 8%) 10,000 1,361 8,639 Debit 100,000 7,985 107,985 Credit Jan. yr. 1 Notes receivable
Chapter 7-31
Chapter 7-32
Segregate the different types of receivables that a company possesses, if material. Appropriately offset the valuation accounts against the proper receivable accounts. Determine that receivables classified in the current assets section will be converted into cash within the year or the operating cycle, whichever is longer. Disclose any loss contingencies that exist on the receivables. Disclose any receivables designated or pledged as collateral.
4. 5.
6.
Chapter 7-33