510chapter7fall2009afterclass11102009

510chapter7fall2009afterclass11102009 - Chapter 7: Cash and...

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Unformatted text preview: Chapter 7: Cash and Chapter 7: Cash and Receivables Receivables Whats Important What is cash and how is it reported? Recognition of accounts receivable Valuation of accounts receivable Recognition of notes receivable Valuation of notes receivable Disposition of notes/accounts receivable Reconciliation of bank balances E5-6 Garfield Company Balance Sheet As of July 31, 2010 Cash $ 69,000 Notes and A/P $ 44,000 A/R (net) 40,500 Long term Liabilities 75,000 Inventories 60,000 Stockholders Equity 155,500 Equipment (net) 84,000 $274,500 Patents 21,000 $274,500 In addition: Cash includes $1,200 in a petty cash fund and $12,000 in a bond sinking fund. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable- debit balances $52,000; (b) accounts receivable-credit balances $8,000; (c ) allowance for doubtful accounts $3,500. Merchandise inventory costing $5,300 was shipped out on consignment on July 31, 2010. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,300 were recognized on these consigned goods. E5-6 (continued) Equipment that had a cost of $112,000 and an accumulated depreciation balance of $28,000. Taxes payable of $6,000 were accrued on July 31. Garfield Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the taxes payable amount. Required: Prepare a corrected classified balance sheet as of July 31, 2010, from the available information, adjusting the account balances using the additional information. E5-8 Required: For each item indicate the dollar amounts to be reported...
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This note was uploaded on 12/29/2009 for the course ACC 5100 taught by Professor Andrews during the Fall '09 term at Wayne State University.

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510chapter7fall2009afterclass11102009 - Chapter 7: Cash and...

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