ch06 intermediate accounting nikolai 課后習(xí)題解答

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1、 CHAPTER 6 CASH AND RECEIVABLES CONTENT ANALYSIS OF EXERCISES AND PROBLEMS Number Content Time Range (minutes) E6-1 Cash. Determination of items to be included as cash on the balance sheet. 5-10 E6-2 Cash Balance. Computing amount to be reported

2、on balance sheet. Treatment of non-cash items. 5-10 E6-3 Petty Cash. Journal entries to record establishment, expenses, and replenishment. 5-10 E6-4 Unknown Cash Balance. Determine cash balance and adjusted cash balance through use of bank reconciliation. Journal entries to

3、 update cash account balance. 5-15 E6-5 Bank Reconciliation. Prepare reconciliation from account balances. Record journal entries to adjust the books. 10-15 E6-6 Bank Reconciliation. Prepare reconciliation from various transactions. Record journal entries to adjust the books.

4、 10-15 E6-7 Bank Statement Balance. Determine cash balance from prior journal entries, no bank statement available. Discrepancy analysis. 10-20 E6-8 Classification of Receivables. Journal entries to properly record receivables. Balance sheet disclosure. 5-10 E6-9 Sale

5、s Discounts. Journal entries to record the sale, collection, and year-end adjustment under the gross price and net price methods. 10-15 E6-10 Discount Methods. Comparison of gross price and net price methods. Journal entries. 10-15 E6-11 Returns and Allowances. Record as actua

6、l, record as estimate. Journal entries, financial statement disclosure. 10-15 E6-12 Bad Debts. Estimation versus direct write-off. Journal entries. 10-15 Number Content Time Range (minutes) E6-13 Bad Debts. Estimating from receivable balances. Journal entries. B

7、alance sheet disclosure. Computation of receivables turnover. 5-15 E6-14 Aging Analysis. Estimation of uncollectible receivables. Journal entries with various balances in the allowance account. 10-20 E6-15 Bad Debts. Comparison of different estimation methods. Journal entrie

8、s for estimates based on total sales, credit sales, and accounts receivable. 10-20 E6-16 (AICPA adapted). Receivables-Bad Debts. Percentage of net sales method. Schedule computing balance in the allowance account. 10-20 E6-17 Assigning Accounts Receivable. Sales return, collect

9、ions, repayment. Journal entries. Balance sheet disclosure. 15-20 E6-18 Factoring Accounts Receivable. Sales returns and allowances on factored accounts. Journal entries. 10-15 E6-19 Credit Card Sales. Sales, sales return. Journal entries. 5-10 E6-20 (AICPA adapted

10、). Factoring and Assigning Accounts Receivable. Income statement disclosure. 15-20 E6-21 Notes Receivable. Interest-bearing, noninterest-bearing. Journal entries. 10-15 E6-22 Notes Receivable Discounted. Interest-bearing, noninterest-bearing. Determination of proceeds. 10-

11、20 E6-23 Notes Receivable Discounted. Journal entries for issuance, discounting, default. 10-20 P6-1 Cash and Other Items. Determination of cash account balance, balance sheet disclosure of other items. 10-20 P6-2 Bank Reconciliation. Preparation from various transactions.

12、 Record journal entries to adjust the books. 20-30 P6-3 Unknown Book Balance. Determination of unadjusted and adjusted cash balances. Journal entries to update account balances. 20-30 P6-4 Bank Reconciliation. Preparation from bank statement. Record journal entries to adjust th

13、e books. 20-40 P6-5 (AICPA adapted) Comprehensive Reconciliation. Bank reconciliation from various transactions. Prepare journal entries to adjust book balance. 60-75 Number Content Time Range (minutes) P6-6 Bad Debts. Change from direct write-off method to est

14、imation of bad debts. Percentage of credit sales, percentage of outstanding accounts receivable. Analysis. 30-40 P6-7 Accounts Receivable. Various transactions affecting receivables. Journal entries. Balance sheet disclosure. 30-40 P6-8 Notes Receivable. Interest-bearing.

15、Discounted. Default. Journal entries. 15-30 P6-9 Reconstructing Entries. Changes in accounts receivable, allowance for doubtful accounts, allowance for sales returns and allowances, and allowance for sales discount. Ending balance and financial statement disclosure. 30-45 P6-10

16、 Cash Discounts. Gross price and net price methods. Journal entries to record sale, collections, and returns. Reversing entries. 30-40 P6-11 Accounts Receivable. Aging analysis. Journal entries to record sale, collection, write-off of accounts receivable, and bad debts expense. Balanc

17、e sheet disclosure. Calculation and discussion of receivables turnover. 35-45 P6-12 Bad Debts. Estimation as a percent of total sales, net credit sales, and gross accounts receivable. Aging analysis. Income statement vs. balance sheet approach. 30-40 P6-13 Notes Receivable. In

18、terest-bearing, discounted. Journal entries. Balance sheet disclosure. 30-40 P6-14 Assigning Accounts Receivable. Journal entries for various transactions. Balance sheet disclosure. 20-30 P6-15 Factoring Accounts Receivable. Sales on account, sales returns and allowances, and

19、sales discounts. Factored and unfactored accounts receivable. Journal entries. 20-30 P6-16 Factoring and Assigning Accounts Receivable. Journal entries for various transactions. Financial statement disclosure. 20-30 P6-17 (AICPA adapted). Accounts Receivable. Reclassification

20、 of accounts. Journal entries to write-off uncollectible accounts and adjust allowance for doubtful accounts. 10-20 P6-18 (AICPA adapted). Bad Accounts. Percentage of sales, original set up of the allowance account. Adjusting journal entries. 40-60 Number Content Time Ra

21、nge (minutes) P6-19 (AICPA adapted). Allowance for Doubtful Accounts. Prepare schedule analyzing changes in allowance account. Prepare related adjusting journal entry. 40-60 P6-20 (AICPA adapted). Correction of Allowance Account. Prepare schedules to analyze initial and subseque

22、nt balance in allowance account, based on historical data. 30-40 P6-21 Comprehensive Receivable Problem. Sales, collections, write-off, bad debts, assignment, returns and allowances, notes receivable discounted, default. Calculation and discussion of receivables turnover. 45-60 P6-2

23、2 (Appendix). Proof of Cash. Preparation of four-column proof of cash from a list of account balances and transactions. 45-60 P6-23 (Appendix). Proof of Cash. Preparation of four-column proof of cash from a list of account balances and transactions. 45-60 ANSWERS TO QUESTI

24、ONS Q6-1 Cash consists of coins, currency, unrestricted funds on deposit with a bank (either checking accounts or savings accounts), negotiable checks, and bank drafts. Certificates of deposit, bank overdrafts, postdated checks, travel advances, and postage stamps may be confused with cash, but

25、these items normally are categorized under other balance sheet captions. Items that are available immediately to pay current debts and are not bound by any contractual or legal restrictions are classified under the "current asset--cash" caption on the balance sheet, and those that do not meet these

26、 criteria are reported elsewhere within the assets (or liabilities, in the case of a bank overdraft) section on the balance sheet. Cash equivalents are short-term, highly liquid investments (e.g., commercial paper, treasury bills, money market securities) that are readily convertible into known amo

27、unts of cash and so near their maturity that there is little risk of changes in value because of changes in interest rates. Q6-2 Internal control is the process (policies and procedures) a company uses to enhance the reliability of its financial reports, promote the effectiveness and efficiency o

28、f its operations (including safeguarding its assets), and ensure its compliance with applicable laws and regulations. Two important elements of internal control over cash are a petty cash system and a bank reconciliation. Q6-3 The purpose of a petty cash system is to allow a company to pay small

29、 amounts that might be impractical or impossible to pay by check. Q6-4 The actual expenses rather than the Petty Cash account are debited when the fund is replenished because the petty cash fund is always carried in the company's accounting records at its original amount. This entry has the effect

30、 of recording the expenses incurred for the period at the time the amount of cash expended is given to the custodian of the fund to replenish the petty cash fund. Q6-5 A bank reconciliation is a schedule prepared by a company to analyze the difference between the ending cash balance in the compan

31、y's accounting records and the ending cash balance reported by its bank in a bank statement in order to determine the correct ending cash balance. The causes of the difference between the cash balance listed on a company's bank statement and the balance shown in the company's cash account include o

32、utstanding checks, deposits in transit, charges made directly by the bank, deposits made directly by the bank, and errors. Q6-6 After the bank reconciliation is completed, adjusting entries are made to bring the company records up to date. The adjustments to the company records on the bank recon

33、ciliation have not been previously recorded by the company, so journal entries must be prepared by the company for these items. An example of an item on a bank reconciliation requiring an adjusting entry would be a bank service charge of $10 deducted on the bank statement but not yet recognized on

34、the company books. The adjusting entry would be a debit to Bank Service Charge Expense for $10 and a credit of $10 to Cash. Q6-7 The two revenue recognition criteria are that (1) realization must have occurred and (2) the revenue must be earned (the earning process must be complete or virtually

35、complete). In the case of some industries (e.g., book publishing), sometimes a company cannot make a reliable estimate of the collectibility of receivables (so realization has not occurred) or the risks and benefits of ownership have not been transferred (so that the earning process is not complete

36、). In these cases, the company must defer revenue recognition. Q6-8 The first method of recording accounts receivable (gross price method) when cash discounts are involved is to record accounts receivable and sales at the gross price. In using this method, a company records both accounts at the

37、 total invoice price as if no cash discount were involved. When the customer pays, if the allowable cash discount is taken the company records the difference between the cash received and the original amount of accounts receivable as a debit to Sales Discounts Taken. If the cash discount is not ta

38、ken, the amount of cash remitted by the customer will be equal to the original balance in the Accounts Receivable account and no further adjustment is necessary. A second method (net price method) is to record accounts receivable and sales at the net invoice price. When the customer pays, if the

39、 allowable cash discount is taken by the customer no adjustment is necessary because the amount of cash received is equal to the recorded amount of the receivable. However, if the customer chooses not to take the cash discount, the amount of cash received is greater than the recorded Accounts Recei

40、vable balance. The company credits this excess to an account entitled Sales Discounts Not Taken. Q6-9 A sales return occurs when a customer returns goods to the seller. A sales allowance occurs when a customer retains defective goods and is allowed a reduction in the purchase price. Conceptual

41、ly, a company should estimate and record sales returns and allowances in the period of sale so as to properly report net sales revenue and correctly value its ending accounts receivable. Q6-10 Under the estimation methods of recording bad debts, a company studies the historical data about the act

42、ual bad debts it has incurred on credit sales or credit accounts receivable as a result of a particular credit policy. This information is then compared with current sales or accounts receivable to determine relationships upon which to base estimates of current uncollectible accounts. These relati

43、onships provide the information the company needs to prepare the adjusting entry to record the estimated bad debt expense for the period. When the estimate of bad debts is recorded, the journal entry involves a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts (or, alternati

44、vely, Allowance for Bad Debts). Estimation methods enable a company to match its expenses with revenues in the current period. Bad debt expense is normally reported on the company's current year income statement as an operating expense. However, some companies offset the account against gross sal

45、es, or disclose it as a financial expense in the other items section of the income statement. The direct write-off method has the advantages of simplicity and of reporting actual losses rather than estimates. When the direct write-off method is used, a company records bad debt expense when it de

46、termines a specific customer account is uncollectible. At that time, the account is written off by debiting Bad Debt Expense and crediting Accounts Receivable. However, this determination and write-off may not occur until a period later than the period of sale. The use of the direct write-off met

47、hod has the disadvantage of matching expenses associated with previous sales with current revenues, and of overstating accounts receivable associated with previous sales. Furthermore, it allows the manipulation of income because management selects the period of write-off (and expense). Q6-11 Und

48、er the sales or income statement approach, a company estimates bad debts based on the historical relationship to sales. This approach matches current revenues and anticipated current expenses. It is income statement oriented because it is based upon the matching principle and results in recording

49、bad debt expense in the period during which credit sales occur. A percentage of total sales may be used as the basis for the estimate when there is a stable relationship between cash and credit sales. However, if the proportion of credit to total sales varies from period to period, a percentage of

50、 total sales is not appropriate to use in any one period and net credit sales should be used. Since this method focuses upon an expense account, any existing balance in the allowance account is ignored. Also, if a company sells many products in different locations, it may choose to extend this ana

51、lysis and estimate bad debts based on the historical net credit sales of particular products or in specific locations. Q6-11 (continued) Under the accounts receivable or balance sheet approach, a company estimates bad debts based on the historical relationship between actual losses and account

52、s receivable. This approach is balance sheet oriented in that the resulting accounts receivable balance is properly reported on the balance sheet at its net realizable value. A relatively simple balance sheet approach is to base the estimated expense on the relationship between the actual bad debt

53、s and the outstanding receivable balance at the end of the year. However, a more sophisticated method is to categorize the outstanding receivables by the length of time they have been outstanding and then apply a different uncollectible percentage to each category. This method is termed "aging."

54、 Q6-12 The net realizable value of a company's accounts receivable is the amount expected to be collected in the future. The company reports the net realizable value of its accounts receivable on its balance sheet by deducting the balance of a contra account, entitled Allowance for Doubtful Accoun

55、ts, from the balance of the Accounts Receivable account. (If a company has other accounts such as Allowance for Sales Returns and Allowances, Allowance for Sales Discounts, and Deferred Gross Profit, it would also deduct these accounts from Accounts Receivable to determine the net realizable value.

56、) Q6-13 The aging of accounts receivable method categorizes individual accounts based on the length of time they are outstanding. The length of time an account is outstanding is an important factor in estimating the probability that it will be collected. A company is much more likely to collect

57、 an open account that is 30 days old than one that is 360 days old. Q6-14 If bad debt expense is recorded based on an estimate, an individual account is written off the accounting records when it is determined to be uncollectible by debiting Allowance for Doubtful Accounts and crediting Accounts

58、Receivable. This write-off is simply an adjustment required to recognize that previously anticipated losses are now realized. It has no effect on the net realizable accounts receivable on the balance sheet because both the asset and contra-asset accounts are reduced by the same amount. There is n

59、o impact on the income statement as a result of this write-off because it does not involve a revenue or expense account. Q6-15 When a company pledges its accounts receivable, it is using these only as collateral for a loan, and the servicing activities generally remain the responsibility of the b

60、orrower. The borrower records the loan in the usual manner and then uses the cash collected from the receivables to repay the loan plus any interest charges. Upon full payment, the pledge is canceled. When a company assigns its accounts receivable to a finance institution (or bank), it enters int

61、o a lending agreement with the institution to receive cash on specific customer accounts. Usually the borrowing company (assignor) retains ownership of the assigned accounts, incurs bad debts, collects the amounts due from customers, and then uses these funds to repay the loan. When a company fact

62、ors its accounts receivable, it sells individual accounts to a finance institution or bank, called a factor. The accounts receivable are sold without recourse so the collection activities and the risk of ownership are assumed by the factor. Also, any related collection costs and bad debt expenses

63、are incurred by the factor. Q6-16 A company (transferor) records the transfer of accounts receivable to a transferee as a sale when all of the following conditions are met: (1) The transferred assets have been isolated from the transferor (i.e., put beyond the reach of the transferor). (2) Th

64、e transferee obtains the right to exchange (e.g., sell) the transferred assets. (3) The transferor does not maintain effective control over the transferred assets through an agreement that entitles and obligates the transferor to repurchase the transferred assets before their maturity. If the

65、conditions for a sale are not met, the company records the proceeds from the transfer of accounts receivable as a secured borrowing with a pledge of collateral. Q6-17 A note receivable is an unconditional written agreement to receive a certain sum of money on a specific date. Notes receivable ha

66、ve two attributes not found in accounts receivable: (1) They are negotiable instruments, which means that they are legally and readily transferable among parties and may be used to satisfy debts by the holders of these instruments, and (2) They usually involve interest. Q6-18 A non-interest-bearing note is a note that does not specify an interest rate. For a short-term non-interest-bearing note, the maturity value is listed as the face value, and includes both principal and implicit interes