BlueCo lends RedCo $100,000 on Sept. 1^st, accepting a 9-month, 10% interest note.

All interest and principal will be paid back at the end of the 9 months.

JE BlueCo records for the note on Sept 1.

As of Dec. 31^st, what adjusting entry must BlueCo record?

JE to record collection of the note and interest on June 1, 2013?

Sale on account Journal Entry:

Collection of A/R Journal Entry:

What is the normal balance for Allowance for Doubtful Accounts (debit or credit)?

What does it mean if Allowance for Doubtful Accounts has a debit balance?

Alco Co uses the % of A/R allowance method

$300,000 Ending A/R Balance

Management estimates 4% uncollectible, AFDA has credit balance $3,000 before adjustment

1-What is the adjusting entry for Bad Debt Expense?

What is impact to A=L+SE

If FAIL to do adjusting entry, what is the impact on the acct. equation?

2-JE for $5,000 needs to be written off for customers who are unable to pay.

What is impact to A=L+SE

If FAIL to do adjusting entry, what is the impact on the acct. equation?

3-What is the Net Realizable Value of A/R before and after the write off?

Managing Receivables

Determine to whom to __________

Establish a payment _______

Monitor ___________

Accelerate cash receipts from receivables when needed by __________________