Chapter 9_Lecture_Summer_2010

Chapter 9_Lecture_Summer_2010 - Chapter 9 Study Objectives...

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1. Identify the different types of receivables. 2. Explain how companies recognize accounts receivable. 3. Distinguish between the methods and bases companies use to value accounts  receivable. 4. Describe the entries to record the disposition of accounts receivable. 5. Compute the maturity date of and interest on notes receivable. 6. Explain how companies recognize notes receivable. 7. Describe how companies value notes receivable. 8. Describe the entries to record the disposition of notes receivable. 9. Explain the statement presentation and analysis of receivables. Chapter 9 Study Objectives Chapter 9 Study Objectives
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Amounts due from individuals and other companies  that are expected to  be collected in cash. Amounts owed by  customers that result  from the sale of goods  and services. Accounts Accounts Receivable Receivable Types of Receivables Types of Receivables Claims for which  formal instruments of  credit are issued as proof of debt . “Nontrade”  (interest,  loans to officers,  advances to employees,  and income taxes  refundable). Notes Notes Receivable Receivable Other Other Receivables Receivables
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Three accounting issues: 1. Recognizing accounts receivable. 2. Valuing accounts receivable. 3. Disposing of accounts receivable. Accounts Receivable Accounts Receivable The following exercise was illustrated in Chapter 5.  For simplicity,  inventory and cost of goods sold have been omitted. Recognizing Accounts Receivable
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Illustration: Illustration:   Presented are transactions related to Wheeler Company. 1. On December 3,Wheeler Company sold $500,000 of merchandise to Hashmi  Co., terms 2/10, n/30, FOB shipping point.  2. On December 8, Hashmi Co. was granted an allowance of $27,000 for  merchandise purchased on December 3. 3. On December 13,Wheeler Company received the balance due from Hashmi Co.  Instructions:   Prepare the journal entries to record these transactions on the  books of Wheeler Company using a perpetual inventory system. Recognizing Accounts Receivable Recognizing Accounts Receivable
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Illustration: Illustration:    Prepare the journal entries for Wheeler Co. 1. On December 3, Wheeler Company sold $500,000 of merchandise to  Hashmi Co., terms 2/10, n/30, FOB shipping point.  Accounts receivable 500,000 Dec. 3 Sales 500,000 Recognizing Accounts Receivable Recognizing Accounts Receivable
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Illustration:    Prepare the journal entries for Wheeler Co. 2. On December 8, Hashmi Co. was granted an     allowance  of $27,000  for merchandise purchased     on December 3. Sales returns and allowances  
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This note was uploaded on 02/08/2011 for the course ACCOUNTING 272 taught by Professor Stein during the Spring '11 term at Rutgers.

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Chapter 9_Lecture_Summer_2010 - Chapter 9 Study Objectives...

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