Wednesday, August 21, 2019

Text & Cases Problem Essay Example for Free

Text Cases Problem Essay 16 to 30 150,000.00 0.94 9,000.00 31 to 45 75,000.00 0.80 15,000.00 46 to 60 45,000.00 0.65 15,750.00 61 to 75 15,000.00 0.50 7,500.00 Over 75 15,000.00 15,000.00 Total 51,750.00 15,000.00 a. Appropriate balance for AFDA is $ 51,750.00 (equals to Allowance Amount in the Aging Schedule) b. Presentation of Accounts Receivable in Balance Sheet: Accounts Receivable 735,000.00 Less: Allowance for Doubtful Accounts 51,750.00 Net, Accounts Receivable 683,250.00 c. Dollar Effect of Bad Debt Expense: AFDA, Beginning Balance 37,500.00 AFDA, Write-Off (15,000.00) AFDA, Movement 29,250.00 AFDA, Ending Balance 51,750.00 Dollar Effect of Bad Debt Expense is $ 29.250.00 (equals to movement amount of AFDA) Case 5-1: Question 1 Stern Corporation General Journal (in USD) Date Account Dr. Cr. 2010 Dec 31 Accounts Receivable 9,965,575.00 Sales 9,965,575.00 31 Cash 9,685,420.00 Accounts Receivable 9,685,420.00 31 Allowance for Doubtful Accounts 26,854.00 Accounts Receivable 26,854.00 31 Accounts Receivable 4,594.00 Allowance for Doubtful Accounts 4,594.00 31 Cash 2,108.00 Accounts Receivable 2,108.00 31 Cash 1,566.00 Accounts Receivable 1,566.00 31 Bad Debt Expense 29,886.00 Allowance for Doubtful Accounts 29,886.00 Case 5-1: Question 2 (in USD) Account Beginning Balance, 2010 Movement, 2010 Ending Balance, 2010 Cash 671,344.00 9,689,094.00 10,360,438.00 Accounts Receivable 988,257.00 254,221.00 1,242,478.00 Allowance for Doubtful Accounts 29,648.00 7,626.00 37,274.00 Sales 9,965,575.00 9,965,575.00 Bad Debt Expenses 29,886.00 29,886.00 a. Accounts Receivable balance as of Dec 31, 2010 is $ 1,242,478.00 b. Allowance for Doubtful Accounts balance as of Dec 31, 2010 is $ 37,274.00 Case 5-1: Question 3 1 Current Ratio Current Asset = 13,574,107.00 = 9.4915 Current Liabilities 1,430,132.00 Current Asset: Cash 10,360,438.00 Accounts Receivable 1,242,478.00 Allowance for Doubtful Accounts (37,274.00) U.S Treasury Securities 274,060.00 Inventories 1,734,405.00 Total Current Asset 13,574,107.00 2 Acid Test Ratio Current Monetary Asset = 11,839,702.00 = 8.2787 Current Liabilities 1,430,132.00 Current Monetary Asset: Cash 10,360,438.00 Accounts Receivable 1,242,478.00 Allowance for Doubtful Accounts (37,274.00) U.S Treasury Securities 274,060.00 Total Current Monetary Asset 11,839,702.00 3 Days Receivable Accounts Receivable = 1,242,478.00 = 45.5071 Days Sales / 365 27,302.95

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