During the first year of operation, 2013, Ferrells Appliance recognized $261,000 of service revenue on account. At
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a. What amount of cash was collected by Ferrells during 2013?
b. Assuming the use of an allowance system to account for uncollectible accounts, what amount should Ferrell record as uncollectible accounts expense in 2013?
c. Prepare the journal entries to
(1) Record service revenue on account.
(2) Record collection of accounts receivable.
(3) Record the entry to recognize uncollectible accounts expense.
d. What is the net realizable value of receivables at the end of 2013?
e. Show the effect of the transactions listed in Requirement c on the financial statements by recording the appropriate amounts in a horizontal statements model like the one shown here. When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA).
The letters NA indicate that an element is not affected by theevent.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
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