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Task 4
Task 4.1-Accounts receivable
Instructions:
After having read and understood the learning resources in this module, work through the following exercises using Chapter 9, “Receivables,” from the textbook. Do this in excel.
Perform the following exercises in which you must analyze the methods to evaluate accounts receivable, perform notes receivable exercises (notes receivable) and define the different types of accounts receivable:
- Define and explain short-term and long-term accounts receivable.
- Equipos y Más a is an electronic equipment company and had several notes receivable. Journalizes the entries of the following accounts receivable:
|
Date |
Transaction |
|
February 10 |
A note receivable was received for $ 150,000 with a term of 4% and 60 days for payment.
|
|
March 12 |
A note receivable for $ 185,000 was received with a 6% term and 120 days to pay.
|
|
April 3 |
Received $ 150,984 of the February 10 note receivable.
|
|
May 16 |
A note receivable of $ 125,000 was received with a 5% term and 40 days to pay.
|
|
June 2 |
$ 188,640.80 was received from the March 12 note receivable. |
|
October 11 |
A note receivable of $ 210,000 is received with a term of 8% and 90 days for payment.
|
|
November 11 |
$ 214,126.08 was received from the account receivable on October 11. |
Task 4.2- Bad debts
Instructions:
After having read and understood the learning resources in this module, work through the following exercises using Chapter 9, “Receivables,” from the textbook. Do this in excel.
Perform the following exercises related to the different situations that exist with uncollectible accounts in a company. Evaluate the aging report.
- Read the following scenario and make the accounts receivable cancellation entries.
Computadoras y Más, a computer systems sales company, decided to cancel the account receivable from its client Tech Master for the balance of $ 52,000.
- Jornalize the entry of the cancellation (write off) assuming direct cancellation method (direct write-off method) and the award method (allowance method).
- Perform the exercises in the following case paying attention to the instructions:
Music Express is a company that sells both car and home stereos.
- Journalize transactions using the direct cancellation method (direct write off method).
- Journalize transactions using the concession method (allowance method) assuming the account credit balance started at $ 28,000 on February 1 and the company uses the accounts receivable method analysis.
Selected Transactions from Music Express Records as of December 31:
- April 10th. Canceled account (wrote off account) by Mario Guzmán for $ 6,400. Journalizes transactions using the award method (award method) assuming the account credit balance started at $ 28,000 on February 1 and the company uses the accounts receivable method analysis.
- June 12. A partial payment of $ 1,500 is received from Margarita Rodríguez's account from a credit account of $ 10,000. The remainder of the balance is written off as uncollectible.
- 20th of August. The amount of $ 6,400 is received from Mario Guzmán from the account that was canceled on April 10. Reinstall the account and record the cash receipt.
- December 31st. Cancel the following accounts as uncollectible (make a journal entry):
|
Ricardo Vega |
$3,200 |
|
Mariela Gutiérrez |
2,440 |
|
Manuel Rosario |
6,200 |
|
Jorge Camacho |
1,800 |
|
Linda Ocasio |
5,330 |
- If necessary, record year-end adjustment entries for doubtful accounts.
- Prepare the aging schedule of the accounts (aging schedule) of the following accounts receivable:
|
Aging classification (number of expiration days) |
(Account balance as of December 31) |
Estimate of the percentage of the account that is uncollectible |
|
0-30 days |
$120,000 |
1% |
|
31-60 days |
80,100 |
2 % |
|
61-90 days |
21,000 |
11% |
|
91- 120 days |
9,000 |
23% |
|
More of 120 days |
15,300 |
65% |
|
Total accounts receivable |
$245,400 |
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