Illustration 8 6 chapter 8 16 so 3 describe the

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Unformatted text preview: sses from uncollectible accounts. Chapter 8-15 SO 3 Describe the methods used to account for bad debts. Valuing Accounts Receivable Valuing Accounts Receivable Under percentage of receivables basis, management establishes a percentage relationship between the amount of receivables and expected losses from uncollectible accounts. Illustration 8-6 Chapter 8-16 SO 3 Describe the methods used to account for bad debts. SO Valuing Accounts Receivable Valuing Accounts Receivable Estimating the Allowance Illustration: Assume the unadjusted trial balance shows Allowance for Doubtful Accounts with a credit balance of $528. Prepare the adjusting entry assuming $2,228 is the estimate of uncollectible receivables from the aging schedule. Dec. 31 Bad debts expense Allowance for doubtful accounts Illustration 8-7 Bad debts accounts after posting Chapter 8-17 1,700 1,700 Valuing Accounts Receivable Valuing Accounts Receivable Illustration 8-8 No te d is c lo s u re o f a c c o u nts re c e iva b le Chapter 8-18 SO 3 Describe the methods used to account for bad debts. Chapter 8-19 Notes Receivable Notes Receivable Companies may grant credit in exchange for a promissory note. A promissory note is a written promise to pay a specified amount of money on demand or at a definite time. Promissory notes may be used: 1. 2. when amount of transaction and credit period exceed normal limits, or 3. Chapter 8-20 when individuals and companies lend or borrow money, in settlement of accounts receivable. Notes Receivable Notes Receivable To the Payee, the promissory note is a note...
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This document was uploaded on 12/18/2013.

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