Accounting For

Managers :
Revenue and Monetary Assets

Accounting For Managers - Presentasi

Kelompok 4
Arza Faldy Prameswara | 1606850564
Ira Muzdhalifah | 1606851005
Luthfi Ardian | 1606851176
Rio Rinaldi Rahardjo | 1606938800
Sukma Kukuh Pribadi | 1606938870

PROBLEM 5-4
1. Huron Corporation has a high rate of bad debts

ISS
UE
S

2. Dec 31 : Hurons Account Receivable was $750.000

3. Dec 31 : Hurons Allowance for Doubtful Accounts

$37.500
Aging Schedule

QUESTION 1 :
THE APPROPRIATE BALANCE
FOR THE ALLOWANCE FOR DOUBTFUL
ACCOUNTS ON DEC 31

NOTES

Piutang berumur lebih dari 75 hari dianggap

tidak tertagih (write-off uncollectible account)

QUESTION 2 :
ACCOUNTS RECEIVABLE WOULD BE
PRESENTED ON THE BALANCE SHEET ON
DEC 31
Saldo AR : $750.000
Allowance for Doubtful :
$51.750
Write off UA : $15.000

Saldo AR
after write
off UA :
$735.000

AR
$735.000
AfD
$
51.750
Net AR
$683.250

QUESTION 3 :
THE DOLLAR EFFECT
ON THE BEFORE TAX INCOME

Adjusted Allowance for Doubtful Accounts :

$51.750
Allowance for Doubtful Accounts (before
adjustment) : $37.500
Write Off : $15.000

Increase/Decrease in bad debt expense

Adjusted AfD Accounts
$51,750
Before adjustment
$37,500
Write-off
($15,000)
AfD Accounts
$22,500
Increase in bad debt expense
$29,250

income
before tax
$29,250

CASE 5-1
STERN
CORPORATION
(A)

ISSUES
1) Sales 0n
account 2010
$ 9,965,575
3) During the
year, Account
receivable $
26,854 were
deemed
uncollectible
and written off
5) The Allowance
for Bad Debts
adjusted to
equal 3% of the
balance in AR at
the end of the
year

2) Payment
received on
account
receivable
2010 $
9,685,420
4) Two account that had
been written off as
uncollectible in 2009
were collected in 2010.
a.Account $ 2,108 was
paid in full
b.Account $ 2,486 had
partial payment
amounted S1,566 by
The Hollowell
Company. The
controller sure this
account would be paid
in full

QUESTION 1 :
Analyze The Effect on AR,
Allowance for Doubtful Account
and any other, prepare journal
entries

Question 1

1
.

Sales on account $9,965,575

Journal :
Dr Accounts Receivable
$9,965,575
Cr Sales
$9,965,575
2
Payment receipt on Account Receivable
.$9,685,420
Journal :
Dr Cash
$9,685,420
Cr Accounts Receivable $9,685,420

3
.

Account Receivable were deemed uncollectible and

written off $26,854
Journal
Dr Allowance for doubtful acc
$26,854
Cr Account Receivable
$26,854

Question 1
4
.

Two Accounts that had been written off in 2009,

were collected.
a. One account paid in full $2,108
b. Other account paid partially $1,566 as
original amount $2,486
Journal 1 :
Dr Cash
$3,674
Cr Bad Debt Expense
Journal 2 :
Dr Cash
$3,674
Cr Other Income

$3,674

$3,674

Journal 3 :
Dr Cash
$3,674
Dr AR
$920
Cr Allowance for doubtful acc

$4,594

The Allowance for Bad Debts adjusted to

equal 3% of the balance in AR at theQuestion
end of 1
the year
5
.

If we choose Journal 1 or Journal 2 :

Account
Receivables
Begin Balance $

988,257

$ 9,685,420
3

1
26,854
End Bal

$ 9,965,575
$ 1,241,588

So the Allowance for Doubtful Expenses is

3% x $ 1,241,588 = $ $37,247
If we choose Journal 3 :
Account
Receivables
Begin Balance $

988,257

$ 9,685,420
3

1
26,854
4
End Bal

$ 9,965,575
$
920
$ 1,242,478

QUESTION 2 :
Give The Correct Total For AR
and The Allowance for Doubtful
Account Dec 31,2010

Question 2
If we use method #1 #2 in question 1.4-1.5
Account Receivable
$
1,241,558
Less Allowance for Doubtful Accounts
-$
37,247
$
If
we
use
method
#3
in question 1.4-1.5
1,204,311
Account Receivable
$
1,242,478
Less Allowance for Doubtful Accounts
-$
37,247
$
1,205,204
Cash
Begin Balance $
2
4
4
End Bal

$
$
$
$

671,344
9,985,420
2,108
1,566
10,360,438

QUESTION 3 :
Calculate Current Ratio, AcidTest Ratio and Days Receivable
of Dec 31,2010

Question 3
A. Current Ratio = Current Assets/Current Liabilities
Current Asset = Cash + (Account Receivable Allowance
for Doubtful
Account) + Tradable Securities + Inventories
= $10,360,438 + $(1,242,478-37,274) +
274,060 +1,734,405
= $13,574,107
Current Liabilities = $1,430,132
Current Ratio = $13,574,107/$1,430,132 = 9.49
B. Acid-test Ratio
= Monetary current
assets/current liabilities
Monetary current assets = Cash + (Account Receivable
Allowance for
Doubtful Account) +
Tradable Securities
= $10,360,438 + $(1,242,478-37,274) +
274,060
= $11,839,702

Acid-test Ratio = $11,839,702/$1,430,132 = 8.28

C. Days-Receivables = Receivables/(Sales/365)
Days Receivables = $(1,242,478-37,274)/ ($9,965,575/365)
= $1,205,204/ $27,303
= 44.1