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    nivadabolster's Avatar
    nivadabolster Posts: 1, Reputation: 1
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    #1

    May 22, 2016, 03:54 PM
    Determine the balances of Accounts receivable and Bad debt expense at December 31, 2
    Determine the balances of Accounts receivable and Bad debt expense at December 31, 2014.?




    Update: Could use some help with this question!
    information:
    during 2014, patchwork had the following transactions:
    1. on June 1 2014, sales of $80,000 to a major customer were settled, with patchwork accepting an $80,000 one year note bearing 7% interest payable at maturity. The $80,000 is not included in the total credit sales amount below.

    2. patchwork factors some of its accounts receivable at the end of the year. Accounts totalling $60,000 are transferred to Primary factors inc with recourse. Primary factors retains 5% of the balances, and will receive the collections directly from patchwork's customers. Patchwork is assessed a finance charge of 6% on this transfer. The fair value of the recourse obligation is $7,000.

    3. patchwork wrote off $3,200 of accounts receivable during 2014.


    4. based on the latest available information, the 2014 allowance for doubtful accounts should have a balance of 12,000 at December 31 2014.

    Additional info:
    included in the cash balance at December 31 2014 are: chequing account balance of $9,600, postage stamps of $100, petty cash of $300, coins and currency on hand of $3000, and postdated cheques from customers of $2,000. Patchwork is a private company that follows ASPE.


    Following account balances:
    12/31/2013 12/31/2014
    cash $20,000 $15,000
    A/R 90,000 ?
    A/4/D/A 8,500 ?
    Inventory 85,000 80,000
    Current Liab. 80,000 86,000
    Total credit sales 600,000 550,000
    Collections on A/R 440,000 500,000



    Questions:
    a. prepare journal entry for factoring of AR to primary factors inc. - I already did this.

    b. determine balances of AR and bad debts expense at December 31 2014 - need help !

    c. prepare current assets section of patchworks statement of financial position at December 31 2014 - need help!
    smoothy's Avatar
    smoothy Posts: 25,490, Reputation: 2853
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    #2

    May 22, 2016, 04:44 PM
    You did a wonderful job cutting and pasting your homework assignment and completely forgot to post your work and YOUR answers as required by the rules of this site.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #3

    May 22, 2016, 09:40 PM
    You know I often wonder what they are teaching these days. The essentials of an account balance are an opening balance, debit entries, credit entries and a closing balance. I don't understand why it is difficult to extract the entries and "post" them in an cccount to establish the balance

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