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8/10/2019 Rizal Tolong Edit Dan Rapiin Dan Bikin Sesuai Dengan Syarat Bapak Itu Makasih -.-V

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RECEIVABLES

TEORI A1. What determines whether receivables are current or noncurrent assets?2.

What is the effect of the write-off of uncollectible accounts (using the allowance

method) on (a

) net income and (b

) net accounts receivable?3.

What is the primary difference between accounts receivable and notes receivable?4. Describe how (and when) the direct write-offmethod accounts for uncollectible

accounts. What are thedisadvantages of this method?

Answer:

1. The factor which determine whether receivables said as current or non-current assets is

the term of that receivables. When a receivable has more than 1 year or 1 accounting

period term, that receivable counted as non-current assets, and otherwise.

2. a. The effect of the write off uncollectible accounts on net income is the reduction of netincome.b. The effect of the write off uncollectible accounts on net accounts receivable is thereduction of net accounts receivable.

3.

4. The direct write-off method is used when receivable are determined uncollectible. The Firstdisadvantages is no matching, second receivable not stated at cash reliazable value, third notacceptable for financial reporting.

SOAL 1AWholesale WarehouseStores sold $950,000 in merchandise during 2011. Of this amount,$400,000 was on credit with terms2/10, n/30 (75 percent of these amounts were paid withinthe discount period), $500,000 was paidwith credit cards (there was a 3 percent credit carddiscount), and the rest was paid in cash. OnDecember 31, 2011, the Accounts Receivable

balance was $80,000. The beginning balance in the Allowance for Doubtful Accounts was$9,000 and $6,000 of bad debts was written off during the year.

Required:

1. Compute net sales for 2011, assuming that sales and credit card discounts are treatedascontra-revenues.2. Assume that Wholesale uses the percentage of sales method for estimating bad debtexpense and thatit estimates that 2 percent of credit sales will produce bad debts. Record bad debt expense for2011.3. Assume instead that Wholesale uses the aging of accounts receivable method and that itestimatesthat $10,000 worth of current accounts is uncollectible. Record bad debt expense for2011.

Given: Sales = $950,000

Accounts Receivables = $400,000

The difference Accounts Receivable Notes Receivable

CollectibleProbability

Low, due to the age ofreceivable

High

Liquidity Liquid More Liquid


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Sales Discount = 400,000 x 75/100 x 2/100 = $6,000

Accounts ReceivableCredit Card = $500,000

Credit Card Expense = 3/100 x 500,000 = $15,000

Cash = $50,000

Answer:

1. Net sales = SalesSales DiscountCredit Card Expense

= 950,0006,00015000

= 929,000

2.

Bad Debt Expense 15,000Allowance for Doubtful Account 15,000

(2% x 900,000 = 18,000-3000)

3. Bad debt Expense 7,000Allowance for Doubtful Account 7,000

SOAL 2ADeby Shoes sold $950,000 in merchandise on credit during 2009. During the same year,DSdetermined that a $500 account balance owed by a deceased customer (R. Cuter) wasuncollectible.

Required:1. Prepare the journal entry to record the write-off of R. Cuters account receivable.2. Assume that DS uses the aging of accounts receivable method and has collected theinformation presented in the aging schedule that follows. As of December 31, 2009, theAllowance for Doubtful Accounts had an unadjusted credit balance of $3,000. Compute thedesired balance foruncollectible accounts and prepare a journal entry to record the bad debtexpense.

Number of days unpaidTotal 0-30 31-60 61-90 >90

Total receivables $171,000 $50,000 $80,000 $40,000 $1,000X Esimated bad debt

%

X 1% X 5% X 15% X 50%

=Estimateduncollectible

3. Assume DS reported net accounts receivable of $160,000 on December 31, 2009, and$167,586on December 31, 2008. Calculate the receivables turnover ratio for 2009.4. If the receivables turnover ratio was 6.4 in 2008, what was the number of days to collect in2008?Given your calculations in requirement 3, were SDS collections in 2009 faster or slowerthancollections in 2008?


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5. Assume that DS uses the percentage of credit sales method (rather than the aging ofaccountsreceivable method) for estimating bad debt expense. If DS estimates that 1 percent ofcreditsales will become bad debts, prepare the journal entry to record those effects.

Answer:1.

Allowance for doubt account 500

Accounts Receivable 500

2.

Age Interval BalanceEstimated Uncollectible Accounts

Percent Amount

1-30 pastdue 50,000 1% 500

31-60 pastdue 80,000 5% 4,00061-90 pastdue 40,000 15% 6,000

>90 pastdue 1,000 50% 500

11,000

Bad debt expense 8,000

Allowance for Doubtful Accounts 8,000

(*11,000-3,000)

2009 2008

Net Sales 950,000 -

Accounts Receivable 160,000 167,586

Average AccountsReceivable

163,793* -

Accounts Receivableturnover

5,8**

* (160,000+167,586) / 2)

** ( 950,000 : 163,793 )

4.

5. Bad debt expense 9,500

Allowance for doubtful Account 9,500

(1% x 950,000)

SOAL 3A


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On March 1 of a recent year, Rocky Mountain Chocolate Factory, Inc. (RMCF) reported thatthecompany had issued $120,000 of notes receivable at an annual interest rate of 10 percent.As a publiccompany, RMCF prepares financial statements every quarter: on May 31, August31, November 30, andFebruary 28. Assume the notes were created on March 1, 2009, whenRMCF lent money to another

company and RMCF receives interest payments semiannually on July 31 and January 31.Required:

1. Calculate the amount of interest that RMCF earned each month after issuing the notes onMarch 1.2. Calculate the amount of the interest payments that RMCF will receive on July 31, 2009,andJanuary 31, 2010.3. Prepare a timeline showing the amount of interest earned and received during each period.4. Prepare journal entries to record the notes issuance, the interest earned, and theinterestpayments received on each given date.

Answer:

1. 120,000 x 10% x 1/12 = $1,000

2. July 31 = 120,000 x 10% x 5/12 = $5,000

January 31 = 120,000 x 10% x 6/12 = $6,000

3.

TimeMay 31 July 31 August 31 November

30January 31 February

28

Total andExplanation

3,000(Interestearned)

2,000(interestearned) ;

5,000(interestreceived)



2,000(interestearned);

6,000(Interestreceived)

1,000(interestearned)

4.

Date DescriptionPostRef.

Debit Credit

March 1 Notes Receivable 120,000

Accounts Receivable 120,000

May 31 Interest receivable 3,000

Interest Revenue 3,000

July 31 Cash 5,000


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Interest receivable 3,000

Interest revenue 2,000

August 31 Interest receivable 1,000


November 30 Interest Receivable 3,000


January 31 Cash 6,000

Interest Receivable 4,000


February 28 Interest Receivable 1,000



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FIXED ASSET

TEORI B1. Define long-lived assets and its characteristics

2.

Distinguish betweena. Capital expenditures and revenue expenditures. How is each accounted for?b. Ordinary repairs and improvements. How is each accounted for?

3. In computing depreciation, three values must be known or estimated; identify and explainthe natureof each.

4. Over what period should an addition to an existing long-lived asset be depreciated?Explain

Answer:

1 . The Long -lived assets or long-term assets , is a type of asset that is expected to be usedfor more than one year . Examples are buildings , means of production , long-term investment, as well as intangible assets .

Characteristics of long-term assets , is used in the long term , or more than one year , are usedfor the activities of the company and has a nominal value of material

2 . A. Capital expenditures are expenditures that are used by manufacturers to improve theefficiency and useful life . Meanwhile , revenue expenditures are expenditures incurred bycompanies in small amounts in order to improve the condition of the equipment , but does notaffect the value of equipment .

b.Ordinary repairs are routine maintenance that is usually only requires a small fund .

Ordinary repairs are considered as revenue expenditure so how menjurnalnya the Repairs andMaintenance Expense recorded in debit . While spending Improvements are intended toexpand , enhance , modify , or add to the useful life of an asset . Improvements are capitalexpenditure so how menjurnalnya by noting the value of the assets referred to in debit .

3 . Cost or price of goods , is the price paid when received mesintersebut .

Residual value or residual value , is to determine how much the company estimates the finalprice of the machine if it will be sold .

Useful life or useful life , the company is forecast to determine how long the machine isfunctioning .

4 . Depreciation journalized at the end of the cycle at the close of the company's books .Usually some companies use the system is a one-year cycle . So , usually journalized by theend of December.

SOAL 1BIts your turn to apply these concepts by answering the followingquestions. In a recentyear, Vary Corporation purchased property, plant, and equipment priced at $2.1 billion.Assume that the company also paid $168 million for sales tax; $20 million for transportationcosts; $12 million for installation and preparation of the property, plant, and equipment

before use; and $1 million in maintenance contracts to cover repairs to the property, plant,

and equipment during use.1. Compute the acquisition cost for the property, plant, and equipment:


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2. How did you account for the sales tax, transportation costs, and installation costs? Explain.

Answer:

1.

Acquisition cost = $2,1 billion + $168 million + $20 million + $12 million

= $2,3 billion

2. Because they are expenditure that improve the asset or extend its useful life (capitalexpenditure )

SOAL 2BAssume that at the end of year 17, Giant Airlines sold an aircraft that was no longer needed

because of the elimination of service to a small city. The aircraft was sold for $11 millioncash. The original cost of the flight equipment of $30 million was depreciated using thestraight-line method over 25 years with no residual value ($1.2 million depreciation expense

per year). The last accounting for depreciation was at the end of year 16; thus, depreciationexpense must be recorded for year 17.

1. Record the entries on the exchange date2.

Now lets assume the same facts as illustrated above except that the asset was sold for

$2,000,000 cash.

Answer:

1.

Depreciation expenseaircraft 1,200,000

Accum. Depreciationaircraft 1,200,000

Accumulated Depreciation 20,400,000

Cash 11,000,000

Aircraft 30,000,000

Gain on disposal of Fixed Assets 1,400,000

2. Accumulated Depreciation 20,400,000Cash 2,000,000

Loss on disposal of fixed assets 7,600,000Aircraft 30,000,000

SOAL 3BDiversified Industries started as a residential construction company. In recent years, it hasexpanded into heavy construction, ready-mix concrete, sand and gravel, constructionsupplies, and earth-moving services. The company completed the following transactionsduring 2010. Amounts have been simplified.

2010


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Jan. 1 The management decided to buy a 10-year-old building for $175,000 and the land onwhich it was situated for $130,000. It paid $100,000 in cash and signed a mortgage note

payable for the rest.Jan. 12 Paid $38,000 in renovation costs on the building prior to use.June 19 Bought a third location for a gravel pit (designated Gravel Pit No. 3) for $50,000

cash. It was estimated that 100,000 cubic yards of gravel could be removed.July 10 Paid $1,200 for ordinary repairs on the building.Aug. 1 Paid $10,000 for costs of preparing the new gravel pit for exploitation.

Dec. 31 Year-end adjustments:

a. The building will be depreciated on a straight-line basis over an estimated useful life of 30years. The estimated residual value is $33,000.

b . During 2010, 12,000 cubic yards of gravel were removed from Gravel Pit No. 3.

c. Diversified purchased another company several years ago at $100,000 over the fair valueof the net assets acquired. The goodwill has an indefinite life.

d. At the beginning of the year, the company owned equipment with a cost of $650,000 andaccumulated depreciation of $150,000. The equipment is being depreciated using the double-declining-balance method, with a useful life of 20 years and no residual value.

e. At year-end, the company tested its long-lived assets for possible impairment of theirvalue. It identified a piece of old excavation equipment with a cost of $156,000 andremaining book value of $120,000. Due to its smaller size and lack of safety features, the oldequipment has limited use. The future cash flows are expected to be$40,000 and the fair value is determined to be $35,000. Goodwill was found not to beimpaired.

December 31, 2010, is the end of the annual accounting period.

Required:

1. record all entries neccessary2. Show the December 31, 2010, balance sheet classification and amount reported for

each of the following items:Fixed assetsland, building, equipment, and gravel pitIntangible assetgoodwill

Answer:

Date DescriptionPostRef.

Debit Credit

January 1 Building 175,000Land 130,000

Cash 100,000Notes Payable 205,000

January 12 Building 38,000

Cash 38,000


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June 19 Gravel pit 50,000Cash 50,000

July 10 Repair & Maintenance Expense 1,200Cash 1,200

August 1 Gravel Pit 10,000Cash 10,000

Adjusting Entries

December 31 Depreciation expense-building 6,000*Acc. Depr-building 6,000*[(213,000-33,000)/30]

December 31 Depreciation expense-gravel pit 7,200*Acc. Depr-gravel pit 7,200*60,000 : 100,000 = 0,6 /cubicyard12,000 x 0,6 = 7,200

December 31 Loss on Impairement ofGoodwill

100,000

Goodwill 100,000

December 31 Depreciation expense-equipment 50,000

Acc. Depr-equipment 50,000[(650,000-150,000) x 2/20]

December 31 Loss on Impairement ofGoodwill

5,000

Goodwill 5,000

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