Asked by Ayeshah Jones on Jul 12, 2024
Verified
During 2010, Dawson's first year of operations, the following transactions occurred:
Credit sales of $2,000,000 \$ 2,000,000 $2,000,000 .
Collections on ac count of $1,700,000 \$ 1,700,000 $1,700,000 .
Accounts receivable written off during the year, $5,000 \$ 5,000 $5,000 .
Estimated uncollectible accounts $8,000 \$ 8,000 $8,000 .
Accepted a $10,000 \$ 10,000 $10,000 one-year. 12% 12 \% 12% note receivable on June 30
Required:
Prepare as appropriate:
a. The receivables portion of Dawson's first year operations balance sheet.
b. Notes to the financial statments for receivalites
Receivables Portion
The part of a company's assets that represents money owed to the company by customers for goods or services delivered or used but not yet paid for.
Balance Sheet
A financial statement summarizing a company's assets, liabilities, and shareholders' equity at a specific point in time.
Financial Statements
Comprehensive reports created to present a business's financial performance and position, typically including the balance sheet, income statement, and cash flow statement.
- Understand the principles of recording transactions affecting cash and receivables.
- Prepare and interpret a balance sheet segment related to receivables.
Verified Answer
Balance sheet clisclosures: Accounts receivable, net $247,000∗∗Notes receivable 10,000Interest on notes receivable 600\begin{array}{lr}\text {Balance sheet clisclosures: }&\\\text {Accounts receivable, net }&\$247,000**\\\text {Notes receivable }&10,000\\\text {Interest on notes receivable }&600\\\end{array}Balance sheet clisclosures: Accounts receivable, net Notes receivable Interest on notes receivable $247,000∗∗10,000600
b.
Notes to the financial statements: Trade receivables $250,000 Allowance, beginning of the year $0 Charged to expense 8,000 Deductions (5,000)Allowance, end of the year $3,000Net receivables ∗$247,000\begin{array}{lr}\text { Notes to the financial statements: }\\\\\text { Trade receivables }&\$250,000\\\text { Allowance, beginning of the year }&\$0\\\text { Charged to expense }&8,000\\\text { Deductions }&(5,000)\\\text {Allowance, end of the year }&\$3,000\\\text {Net receivables }&*\$247,000\\\end{array} Notes to the financial statements: Trade receivables Allowance, beginning of the year Charged to expense Deductions Allowance, end of the year Net receivables $250,000$08,000(5,000)$3,000∗$247,000
Notes receivable due June 30, 2010, 12% interest rate, annual interest $10, 000
Learning Objectives
- Understand the principles of recording transactions affecting cash and receivables.
- Prepare and interpret a balance sheet segment related to receivables.
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