Title | Ch08 - financial accounting |
---|---|
Course | Introduction to financial accounting |
Institution | 서울대학교 |
Pages | 51 |
File Size | 781.1 KB |
File Type | |
Total Downloads | 28 |
Total Views | 283 |
financial accounting...
CHAPTER 8 Accounting for Receivables ASSIGNMENT CLASSIFICATION TABLE
Learning Objectives
Questions
Brief Exercises
Do It!
Exercises
Problems
1.
Explain how companies recognize accounts receivable.
1, 2, 3
1, 2
1
1, 2, 3, 4
1, 6, 7
2.
Describe how companies value accounts receivable and record their disposition.
4, 5, 6, 7, 8, 9, 10, 11, 12
3, 4, 5, 6, 7, 11
2a, 2b
4, 5, 6, 7, 8, 9, 10, 11
1, 2, 3, 4, 5, 6, 7
3.
Explain how companies recognize value, and dispose of notes receivable.
13, 14, 15, 16,17
8, 9, 10
3
12, 13, 14, 15
6, 7
4.
Describe the statement presentation and analysis of receivables.
18, 19, 20
3, 11, 12
4
16, 17
1, 6, 8, 9
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
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8-1
ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description
8-2
Difficulty Time Level Allotted (min.)
1
Prepare journal entries related to bad debt expense.
Simple
15–20
2
Compute bad debt amounts.
Moderate
20–25
3
Journalize entries to record transactions related to bad debts.
Moderate
20–30
4
Journalize transactions related to bad debts.
Moderate
20–30
5
Journalize entries to record transactions related to bad debts.
Moderate
20–30
6
Prepare entries for various credit card and notes receivable transactions.
Moderate
40–50
7
Prepare entries for various receivable transactions.
Complex
50–60
8
Calculate and interpret various ratios.
Moderate
10–15
9
Prepare financial statements.
Moderate
25–35
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
WEYGANDT FINANCIAL ACCOUNTING, IFRS Edition, 4e CHAPTER 8 ACCOUNTING FOR RECEIVABLES Number BE1
LO
BT
Difficulty
Time (min.)
1
C
Simple
1–2
BE2
1
AP
Simple
5–7
BE3
2, 4
AN
Simple
4–6
BE4
2
AP
Simple
4–6
BE5
2
AP
Simple
4–6
BE6
2
AP
Simple
2–4
BE7
2
AN
Simple
4–6
BE8
3
AP
Simple
6–8
BE9
3
AP
Simple
8–10
BE10
3
AP
Moderate
8–10
BE11
2, 4
AP
Simple
2–4
BE12
4
AP
Simple
4–6
DI1
1
AP
Simple
5–7
DI2a
2
AP
Simple
2–4
DI2b
2
AP
Simple
2–4
DI3
3
AP
Simple
4–6
DI4
4
AN
Simple
4–6
EX1
1
AP
Simple
8–10
EX2
1
AP
Simple
8–10
EX3
1
AN
Simple
8–10
EX4
1,2
AN
Simple
6–8
EX5
2
AP
Simple
6–8
EX6
2
AP
Simple
6–8
EX7
2
AP
Simple
4–6
EX8
2
AP
Simple
6–8
EX9
2
AP
Simple
6–8
EX10
2
AN
Simple
8–10
EX11
2
AN
Simple
6–8
EX12
3
AP
Moderate
10–12
EX13
3
AP
Simple
8–10
EX14
3
AP
Simple
8–10
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
8-3
ACCOUNTING FOR RECEIVABLES (Continued) Number
LO
BT
Difficulty
Time (min.)
EX15
3
AP
Simple
8–10
EX16
4
AP
Simple
4–6
EX17
4
AP
Simple
8–10
P1
1, 2, 4
AN
Simple
15–20
P2
2
AN
Moderate
20–25
P3
2
AN
Moderate
20–30
P4
2
AN
Moderate
20–30
P5
2
AN
Moderate
20–30
P6
1, 2, 3, 4
AN
Moderate
40–50
P7
1, 2, 3
AP
Complex
50–60
P8
4
AN
Moderate
10–15
P9
4
AP
Moderate
25–35
CT1
2
E
Moderate
20–25
CT2
4
AN, E
Simple
10–15
CT3
2
C
Simple
10–15
CT4
2
AN
Moderate
20–30
CT5
2
E
Simple
10–15
CT6
2
E
Simple
10–15
8-4
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
Copyri
Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
ght © 2019 WILE
Learning Objective
Knowledge
Comprehension
Application
Analysis
Synthesis
Evaluation
Y Weyg
1.
Explain how companies recognize accounts receivable.
Q8-2
Q8-1 BE8-1
Q8-3 BE8-2 DI8-1 E8-1
E8-2 P8-7
E8-3 E8-4 P8-1 P8-6
2.
Describe how companies value accounts receivable and record their disposition.
Q8-8 Q8-9
Q8-4 Q8-5 Q8-6 Q8-10 Q8-12
Q8-11 BE8-4 BE8-5 BE8-6 BE8-11 DI8-2a E8-5 DI8-2b
E8-7 E8-6 E8-8 E8-9 P8-7
P8-6 Q8-7 BE8-3 BE8-7 E8-3 E8-4 E8-10 E8-11
3.
Explain how companies recognize, value, and dispose of notes receivable.
Q8-13
Q8-16 Q8-17
BE8-8 BE8-11 Q8-14 Q8-15 BE8-9 BE8-10 DI8-3
E8-13 P8-6 E8-14 E8-15 P8-7 E8-12
4.
Describe the statement presentation and analysis of receivables.
Q8-18
Q8-20
Q8-19 E8-14 BE8-11 P8-7 BE8-12 E8-12 E8-13
andt, Finan cial Accou nting, IFRS 4/e, Soluti ons Manu al (For Instru ctor Use Only)
Expand Your Critical Thinking
Real-World Focus
P8-1 P8-2 P8-3 P8-4 P8-5
BE8-3 DI8-4 P8-1 P8-6 P8-8 Decision-Making Across the Organization Comparative Analysis
Financial Reporting Comparative Analysis Ethics Case Communication
BLO OM’ S TAX ONO MY TAB LE
ANSWERS TO QUESTIONS 1.
Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services. Notes receivable represent claims that are evidenced by formal instruments of credit.
2.
Other receivables include nontrade receivables such as interest receivable, loans to company officers, advances to employees, and income taxes refundable.
3.
Accounts Receivable.............................................................................................. Interest Revenue............................................................................................
40 40
4.
The essential features of the allowance method of accounting for bad debts are: (1) Uncollectible accounts receivable are estimated and matched against revenue in the same accounting period in which the revenue occurred. (2) Estimated uncollectibles are debited to Bad Debt Expense and credited to Allowance for Doubtful Accounts through an adjusting entry at the end of each period. (3) Actual uncollectibles are debited to Allowance for Doubtful Accounts and credited to Accounts Receivable at the time the specific account is written off.
5.
Roger Holloway should realize that the decrease in cash realizable value occurs when estimated uncollectibles are recognized in an adjusting entry. The write-off of an uncollectible account reduces both accounts receivable and the allowance for doubtful accounts by the same amount. Thus, cash realizable value does not change.
6.
TSMC reports Receivables from related parties and other receivables from related parties under Current Assets. It uses the allowance method to account for uncollectibles.
7.
The adjusting entry is: Bad Debt Expense................................................................................ 280,000 Allowance for Doubtful Accounts (NT$580,000 – NT$300,000).....
280,000
8.
Under the direct write-off method, bad debt losses are not estimated and no allowance account is used. When an account is determined to be uncollectible, the loss is debited to Bad Debt Expense. The direct write-off method makes no attempt to match bad debts expense to sales revenues or to show the cash realizable value of the receivables in the statement of financial position.
9.
Offering credit usually results in an increase in sales because customers prefer to “buy now and pay later”. If a company decides to extend credit to customers, it should also establish credit standards to determine if a particular customer is credit worthy. Standards that are easily met can result in additional sales being made to customers that may not be able to meet the “tighter” credit policies of competitors. If such customers fail to pay, the additional sales revenue will be offset by higher collection costs and bad debt expense.
10.
From its own credit cards, the Freida ASA may realize financing revenue from customers who do not pay the balance due within a specified grace period. Other credit cards offer the following advantages: (1) The credit card issuer makes the credit investigation of the customer. (2) The issuer maintains individual customer accounts.
8-6
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
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Questions Chapter 8 (Continued) (3) The issuer undertakes the collection process and absorbs any losses from uncollectible accounts. (4) The retailer receives cash more quickly from the credit card issuer than it would from individual customers. 11.
The reasons companies are selling their receivables are: (1) Receivables may be sold because they may be the only reasonable source of cash. (2) Billing and collection are often time-consuming and costly. It is often easier for a retailer to sell the receivables to another party with expertise in billing and collection matters.
12.
Cash....................................................................................................... 7,760,000 Service Charge Expense (3% X HK$8,000,000)..................................... 240,000 Accounts Receivable....................................................................... 8,000,000
13.
A promissory note gives the holder a stronger legal claim than one on an accounts receivable. As a result, it is easier to sell to another party. Promissory notes are negotiable instruments, which means they can be transferred to another party by endorsement. The holder of a promissory note also can earn interest.
14.
The maturity date of a promissory note may be stated in one of three ways: (1) on demand, (2) on a stated date, and (3) at the end of a stated period of time.
15.
The maturity dates are: (a) March 13 of the next year, (b) August 4, (c) July 20, and (d) August 30.
16.
The missing amounts are: (a) €15,000, (b) €9,000, (c) 6%, and (d) four months.
17.
When Jana Company has dishonored a note, the lender can set up a receivable equal to the face amount of the note plus the interest due. It will then try to collect the balance due, or as much as possible. If there is no hope of collection it will write-off the receivable.
18.
Each of the major types of receivables should be identified in the statement of financial position or in the notes to the financial statements. Both the gross amount of receivables and the allowance for doubtful accounts should be reported. If collectible within a year or the operating cycle, whichever is longer, these receivables are reported as current assets immediately above short-term investments.
19.
Net credit sales for the period are 8.14 X
20.
TSMC’s 2016 allowance for doubtful accounts of $480,118 represents less than 1% of its gross receivables of $128,815,389.
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400,000 =
3,256,000.
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
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8-7
SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 8.1 (a) Accounts receivable. (b) Notes receivable. (c) Other receivables. BRIEF EXERCISE 8.2 (a) Accounts Receivable............................................ Sales Revenue...............................................
17,200
(b) Sales Returns and Allowances............................ Accounts Receivable....................................
3,800
(c) Cash ($13,400 – $268)........................................... Sales Discounts ($13,400 X 2%).......................... Accounts Receivable ($17,200 – $3,800)........
13,132 268
17,200 3,800
13,400
BRIEF EXERCISE 8.3 (a) Bad Debt Expense................................................ Allowance for Doubtful Accounts................
31,000 31,000
(b) Current assets Prepaid insurance......................................... Inventory........................................................ Accounts receivable..................................... €600,000 Less: Allowance for doubtful Accounts............................................ 31,000 Cash............................................................... Total current assets..................................
8-8
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
€ 7,500 130,000 569,000 90,000 €796,500
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BRIEF EXERCISE 8.4 (a) Allowance for Doubtful Accounts.............................. Accounts Receivable—Gray............................... (b)
(1) Before Write-Off Accounts receivable Allowance for doubtful accounts Cash realizable value
6,200 6,200
(2) After Write-Off
¥700,000
¥693,800
54,000 ¥646,000
47,800 ¥646,000
BRIEF EXERCISE 8.5 Accounts Receivable—Gray.............................................. Allowance for Doubtful Accounts.............................. Cash..................................................................................... Accounts Receivable—Gray......................................
6,200 6,200 6,200 6,200
BRIEF EXERCISE 8.6 (a) Bad Debt Expense [(£420,000 X 1%) – £1,500]............ Allowance for Doubtful Accounts......................
2,700 2,700
(b) Bad Debt Expense [(£420,000 X 1%) + £800] = £5,000 BRIEF EXERCISE 8.7 (a) Cash (€175 – €7).......................................................... Service Charge Expense (€175 X 4%)....................... Sales Revenue.....................................................
168 7
(b) Cash (€60,000 – €1,800).............................................. Service Charge Expense (€60,000 X 3%).................. Accounts Receivable..........................................
58,200 1,800
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60,000
8-9
BRIEF EXERCISE 8.8 Interest
Maturity Date
(a) NT$800 (b) NT$1,120 (c) NT$200
August 9 October 12 July 11
BRIEF EXERCISE 8.9 Maturity Date
Annual Interest Rate
(a) May 31 (b) August 1 (c) September 7
6% 8% 10%
Total Interest 6,000 600 6,000
BRIEF EXERCISE 8.10 Jan. 10 Feb. 9
Accounts Receivable........................................ Sales Revenue...........................................
84,600
Notes Receivable.............................................. Accounts Receivable................................
84,600
84,600 84,600
BRIEF EXERCISE 8.11 (a) Bad Debt Expense................................................. Allowance for Doubtful Accounts................
18,000 18,000
(b) Current assets Supplies.......................................................... R$ 13,000 Inventory......................................................... 180,000 Accounts receivable...................................... R$400,000 Less: Allowance for doubtful accounts...... 18,000 382,000 Cash................................................................ 90,000 R$665,000
8-10
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