Recognition of accounts receivables recognition of

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Unformatted text preview: r the balance due from Arquette Company. Prepare the journal entries on Bolton Company books to record the sale assuming Bolton records sales using the net method. June 3 Accounts receivable 1,960 Sales 1,960 Chapter 7-17 Cash ($2,000 x 98%) 1,960 Accounts receivable June 12 1,960 LO 4 Explain accounting issues related to recognition of accounts receivable. Recognition of Accounts Receivables Recognition of Accounts Receivables E7-5: On June 3, Bolton Company sold to Arquette Company merchandise having a sale price of $2,000 with terms of 2/10, n/60, f.o.b. shipping point. Prepare the journal entries on Bolton Company books to record the sale assuming Bolton records sales using the net method, and Arquette did not remit payment until July 29. June 3 Accounts receivable 1,960 Sales June 12 1,960 Cash 2,000 Accounts receivable 1,960 Sales Discounts Forfeited Chapter 7-18 40 LO 4 Explain accounting issues related to recognition of accounts receivable. Recognition of Accounts Receivables Recognition of Accounts Receivables Nonrecognition of Interest Element A company should measure receivables in terms of their present value. The profession specifically excludes from present value considerations “receivables arising from transactions with customers in the normal course of business which are due in customary trade terms not exceeding approximately one year.” Chapter 7-19 LO 4 Explain accounting issues related to recognition of accounts receivable. Accounting for Accounts Receivable Accounting for Accounts Receivable Accounting How are these accounts presented on the Balance Sheet? How are these accounts presented on the Balance Sheet? Accounts Receivable Allowance for Doubtful Accounts Beg. 500 25 Beg. End. 500 25 End. Chapter 7-20 LO 4 Explain accounting issues related to recognition of accounts receivable. Accounting for Accounts Receivable Accounting for Accounts Receivable Assets Current Assets: Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaids Total current assets Fixed Assets: Office equipment Furniture & fixtures Less: Accumulated depreciation Total fixed assets Total Assets Chapter 7-21 $ 500 (25) 346 475 812 40 1,673 $ 5,679 6,600 (3,735) 8,544 10,217 LO 4 Explain accounting issues related to recognition of accounts receivable. Accounting for Accounts Receivable Accounting for Accounts Receivable Assets Current Assets: Cash Accounts receivable, net of $25 allowance I nventory P repaids Total current assets Fixed Assets: Office equipment Furniture & fixtures Less: Accumulated depreciation Total fixed assets Total Assets Chapter 7-22 $ $ 346 475 812 40 1,673 5,679 6,600 (3,735) 8,544 10,217 LO 4 Explain accounting issues related to recognition of accounts receivable. Accounting for Accounts Receivable Accounting for Accounts Receivable Accounting Journal entry for cre...
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This document was uploaded on 02/08/2014.

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