【導讀】TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. Have?itsbills!TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. Have?TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. Have?xcess?cash. temporarily.needed.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. Travelers?checks. accept.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. estricted?Ca. TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. money.lineofcredit.innotes.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. accountingperiod.equivalents.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. amountsofidlecash.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. repaydebt.stockholders.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill. cash.TheMcGraw-HillCompanies,Inc.,1999Irwin/McGraw-Hill

　　

【正文】 s $500. Per the previous putation, the desired balance is $1,350. 500 850 1 , 3 5 0 A l l o w a n c e f o r D o u b t f u l A c c o u n t sEstimating Credit Losses ?The balance Sheet?Approach ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Guess What! There is another alternative to estimate the uncollectible accounts! ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill An Alternative Approach to Estimating Credit Losses Uncollectible accounts?percentage is based on actual uncollectible accounts from prior years?credit sales. Focus is on determining the amount to record on the ine statement as Uncollectible Accounts Expense. ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill An Alternative Approach to Estimating Credit Losses N e t C r e d i t S a l e s? % E s t i m a t e d U n c o l l e c t i b l eA m o u n t o f J o u r n a l E n t r y?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill An Alternative Approach to Estimating Credit Losses In 2020, EastCo had credit sales of $60,000. Historically, 1% of EastCo抯 accounts have been uncollectible. For 2020, the estimate of uncollectible accounts expense is $600. ($60,000 ?.01 = $600) Now, prepare the adjusting entry for December 31, 2020. ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill An Alternative Approach to Estimating Credit Losses G E N E R A L J O U R N A LD a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n D e b i t C r e d i tD e c . 31 U n c o l l e c t i b l e A c c o u n t s E x p e n s e 600A l l o w a n c e f o r D o u b t f u l A c c o u n t s 600?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Uncollectible Accounts Summary % of Receivables Emphasis on Realizable Value Accts. Rec. All. for Doubtful Accts. Aging of Receivables Emphasis on Realizable Value Accts. Rec. All. for Doubtful Accts. Balance Sheet Focus Balance Sheet Focus % of Sales Emphasis on Matching Sales Uncoll. Accts. Exp. Ine Statement Focus ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Direct WriteOff Method This method makes no attempt to match revenue with the expense of uncollectible accounts. G E N E R A L J O U R N A LD a t e A c c o u n t T i t l e s a n d E x p l a n a t i o n D e b i t C r e d i tJ u n e 15 U n c o l l e c t i b l e A c c o u n t s E x p e n s e $$$$A c c o u n t s R e c e i v a b l e ( X C u s t o m e r ) $$$$?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Ine Tax Regulations and Financial Reporting Direct writeoff method required to calculate taxable ine. Taxable Ine Financial Statement Ine Allowance methods better match expenses with revenues. ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Internal Controls for Receivable Separate the following duties: ?Maintenance of the accounts receivable subsidiary ledger. ?Custody of cash receipts. ?Authorization of accounts receivable writeoffs. ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Management of Accounts Receivable Credit Terms Minimize Accounts Receivable Extending credit encourages customers to buy from us . . . . . . but it ties up resources in accounts receivable. ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Ways to Minimize Amounts in Accounts Receivable Selling Accounts Receivable Credit Card Sales ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Evaluating the Quality of Accounts Receivable Accounts Receivable Turnover Rate This ratio provides useful information for evaluating how efficient management has been in granting credit to produce revenue. Net Sales Average Accounts Receivable ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill Evaluating the Quality of Accounts Receivable Avg. Number of Days to Collect A/R This ratio helps judge the liquidity of a pany’s accounts receivable. Days in Year Accounts Receivable Turnover Ratio ?The McGrawHill Companies, Inc., 1999 Irwin/McGrawHill End of Chapter 7