Maker is a promising party legally obliged to pay principal and interest at the maturity date. Some companies may choose to even give a discount if the amount is paid back or received within 20 days. Allowance — January 1 Recoveries — 2008 10,000 Doubtful accounts — 2008 squeeze Total Less: Writeoff — 2008 Allowance — December 31. Income Statement — revenues minus expenses equal net income 14. Purchased goodwill should be recorded as an asset. What is the difference between an account receivable and a note receivable? These statements are key to both financial modeling and accounting. Be able to account for the various phases in the life cycle of a note, including issuance, interest accruals, and maturity.
What happens if we do not pay it back within the discount period? These three core statements are intricately linked to each other and this guide will explain how they all fit together. Know the 3 activities that business engage in and give examples of each activity. Know the primary objective of financial reporting 10. Revenue arises from the act of selling and not from the act of buying. By doing so, the debtor typically benefits by having more time to pay. Therefore, when payment is made on a note receivable, both the balance sheet and the income statement are affected. Allowance for doubtful accounts Accounts receivable Accounts receivable Allowance for doubtful accounts Cash 80,000 80,000 60,000 60,000 10,000 10,000 10,000 Accounts receivable 7.
Reconciliation on July 1 Adjusted book balance 1,270,000 44 Bank balance 1,720,000 Add: Deposit in transit 500,000 Total 2,220,000 Less: Outstanding checks 950,000 Adjusted bank balance 1,270,000 Reconciliation on July 31 Book balance 470,000 Add: Note collected by bank 1,500,000 Total 1,970,000 Less: Bank service charge 20,000 Adjusted book balance 1,950,000 Bank balance 2,700,000 Add: Deposit in transit 400,000 Total 3,100,000 Less: Outstanding checks: Check 107 108 1,150,000 Adjusted bank balance 650,000 500,000 1,950,000 b. Kung baga, yun yung future value ng note mo Principal plus Interest. It also represents the residual value of assets minus liabilities. The advances to affiliates should be classified as noncurrent and presented as long-term investment. Cash in bank Bank service charge Note receivable Interest income 270,000 10,000 2. A company that frequently exchanges goods or services for notes would probably include a debit column for notes receivable in the sales journal so that such transactions would not need to be recorded in the general journal. In Addition, the factor may provide a debtor management service, whereby it take over the control and collection of debts from the clients.
Accounts receivable 40,000 + 60,000 Cash on hand 100,000 100,000 Advances to employees Cash short or over Petty cash fund Cash in bank 100,000 + 150,000 Accounts payable 250,000 3,000 2,000 5,000 250,000 Problem 3-7 1. Accounts receivable Cash on hand 50,000 50,000 Receivable from officer Expenses Cash short or over Petty cash 2,000 12,000 Philippine Bank current Accounts payable 70,000 1,000 15,000 70,000 City Bank current 100,000 Bank overdraft 100,000 Problem 3-8 Fluctuating Fund System 1. Interest rate is a rate agreed by a payee and maker expressed as a percentage of principal. Recording Notes Receivable Transactions Customers frequently sign promissory notes to settle overdue accounts receivable balances. Accounts receivable 15,000 + 25,000 Cash in foreign bank Advances to officers Sinking fund cash Trading securities Bank overdraft Cash 60,000 500,000 100,000 2,000,000 2,810,000 40,000 100,000 30,000 450,000 120,000 50,000 690,000 Problem 3-4 Adjusting entries on December 31, 2008 a. These statements are key to both financial modeling and accounting.
These items are taken from the financial statements of Donavan Co. Materiality Going concern Income recognition principle Accounting entity Standard of adequate disclosure Comparability Matching principle Cost principle Reliability Time period Problem 1-15 1. Post lang ng tanong then I'll get to it as soon as possible. Ito ang table ng interest at carrying value tapos papakita ko kung paano kinompute yung yearly interest Since hindi sakto yung end of period sa calendar end period, yung interest iaappropriate natin. Receivables are normally current assets but some may have a non-current depending on their maturity. The discounts benefit both parties because the borrower receives their discount while the company receives their cash repayment sooner as companies require cash for their operating activities. Cash in bank Accounts payable Miscellaneous income 30,000 20,000 10,000 2.
Sorry talaga kung di ako masyado nakakareply ngayon, medyo busy kasi pero soon enough, I'll be able to answer your questions po. These three core statements are intricately linked to each other and this guide will explain how they all fit together. Currency and coins Check drawn payable to petty cashier Adjusted petty cash 1,000 14,000 15,000 3. The entry is incorrect because no revenue shall be recognized until a sale has taken place. Cash Sales discount 5% x 720,000 Accounts receivable 10% x 7,200,000 3. Required allowance 5% x 600,000 Add: Debit balance in allowance account Doubtful accounts expense Doubtful accounts Allowance for doubtful accounts 30,000 10,000 40,000 40,000 40,000 b.
Notice that the entry does not include interest revenue, which is not recorded until it is earned. Definition Notes receivable is the amount a business has a legal right to receive on a specific date from another party backed by a written promise, which is also called a promissory note. In accounting, there are a lot of times where companies will purchase items on account not for cash. Doubtful accounts Allowance for doubtful accounts 39,000 — 38,000 1,000 7,000 65,000 38,000 1,000 Problem 5-24 2008 Jan. Cash in bank Accounts payable 270,000 Accounts receivable 180,000 450,000 2. The fact that the customer has not been seen for a year is not a controlling factor to write off the account. Notes and Adjusting Entries In the illustrations for Butchko, all of the activity occurred within the same accounting year.
Kung baga ganito yung logic kung paano kinukuha yung accrual ng interest every Dec. Accounts receivable Sales Cash 510,000 500,000 10,000 56 2. Receivable from cashier Accounts receivable Sales discounts 40,000 30,000 Problem 4-13 90,000 10,000 a. The contingent loss is simply disclosed. If its due date is more than a year in the future, it is considered a non-current asset.
Conservatism dictates that goodwill should be recognized when paid for. I hope wag po kayo magsawang sumubaybay! Nababasa ko po yung mga pinopost nyong tanong at isa-isa ko sila ginagawaan ng lecture. . On June 1, 2010 Dela Rosa wrote a promise to pay P2,000,000 to Benavides, bearing an interest of 3%, on May 30, 2013 with the interest payable yearly. The deposit on contract should be classified as noncurrent and presented as other noncurrent asset. When a company sells goods or provides services, the customers rarely makes payment on spot. Supplies Accounts payable Petty cash fund 1,000 3,000 5.