课件中级财务会计Ⅰ.ppt
Accounts ReceivableResult from the credit sales of goods or services to customers. Are classified as current assets. Are recorded net of trade discounts. To give quantity discounts to large customersNet of trade discounts a manufacturer might list a machine part at $2,500 but sell it to a customer a 10% discount. The trade discount of $250 is not recognized directly when recording the transaction. The discount is recognized indirectly by recording the sale at the net of discount price of $2,250, not at the list price. Trade discount is recognized indirectly, why? How to recognize in the company account book?Cash discountsCash Discounts2/10,n/30Number of days discount is availableOtherwise, net (or all) is due CreditperiodDiscount percentCash DiscountsOpportunity cost for Cash discount If interest rate of loan is 18%, a certain company provides credit policy is 2/10,n/30, this credit policy is useful ,or not? Why ? Work in group(10 minutes for discussion)Cash DiscountsSales are recorded at the invoice amounts.Sales discounts are recorded as reduction of revenue if payment is received within the discount period.Gross MethodSales are recorded at the invoice amount less the discount.Sales discounts forfeited are recordedas interest revenue if payment is received after the discount period.Net MethodSales DiscountsAlternative Methods of Accounting for Sales DiscountsSold $7,000 of merchandise to various customers on December 4, 2009 with terms of 2/10, n/30Accounts Receivable 7,000Sales7,000Accounts Receivable 6,860Sales6,860$7,000 - ($7,000 x 0.02)Sales DiscountsAlternative Methods of Accounting for Sales DiscountsOn December 13 received payment on goods at $5,500. Cash 5,390Sales Discount110Accts. Receivable5,500Cash5,390Accts. Receivable5,390$5,500 - ($5,500 x 0.02)Sales DiscountsAlternative Methods of Accounting for Sales DiscountsReceived payment on goods at $1,500 on December 30Cash 1,500Accts. Receivable1,500Cash1,500Accts. Receivable1,470Interest revenues 30$1,500 - ($1,500 x 0.02)Cash Discounts On October 5, Hawthorne sold merchandise for $20,000 with terms 2/10, n/30. On October 14, the customer sent a check for $13,720 taking advantage of the discount to settle $14,000 of the amount. On November 4, the customer paid the remaining $6,000. Exercise P85 E 2-4Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2011. The units have a list price of $600 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Required: 1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2011, gross method 2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2011, gross method 3. Repeat requirements 1 and 2 , net method.Answer 2 Requirement 1Sales price = 100 units x $600 = $60,000 x 70% = $42,000 November 17, 2011 Accounts receivable42,000Sales revenue 42,000 November 26, 2011 Cash (98% x $42,000) 41,160 Sales discounts (2% x $42,000) 840Accounts receivable42,000 Requirement 2 November 17, 2011 Accounts receivable42,000Sales revenue42,000 December 15, 2011 Cash42,000Accounts receivable42,000 Requirement 3Requirement 1, using the net method: November 17, 2011 Accounts receivable41,160Sales revenue (98% x $42,000) 41,160 November 26, 2011 Cash41,160Accounts receivable41,160 Requirement 2, using the net method: November 17, 2011 Accounts receivable41,160Sales revenue (98% x $42,000)41,160 December 15, 2011 Cash42,000Accounts receivable41,160Interest revenue 840The net method the net method reflects the reality of the situation-the real price is $41,160 and $840 is an interest for not paying timely. customer should accept cash discount, for the interest is high, not 2%, but ($2/$98) *365/20= 37.23% effective rate Certainly, the customer could consider the investment profit for these 20 days. The gross or net method Which is correct? About income statement - no effect ! Gross Method Net Method Sales $20,000 $19,600 Less: Sales discounts (280) 0 Net sales revenue 19,720 19,600 Interest revenue 0 120 Total revenue $19,720 $19,720 About concepts The difference is the timing of the recognition of any discounts. the gross method is used by most companies, because it doesnt require adjusting entries for discounts not taken. Subsequent Valuation of Accounts Receivable 后续计量 three situations could cause the cash collected to be less than the initial valuation of the account receivables: (1) cash discount (2) sale return (3) some account receivables cant be collectedMerchandise may be returned by a customer to a supplier.A special price reduction, called an allowance, may be given as an incentive to keep the merchandise.Sales ReturnsOverstate or understate Suppose merchandise is sold for $10,000 in December 2011, the merchandise cost $6,000. If all of the merchandise is returned in 2012.gross profit will be overstated in 2011 and u
