User Account

All Pages

How magrath should account for the collection

Assignment Help Financial Accounting
Reference no: EM13341333

Magrath Company has an operating cycle of less than one year and provides credit terms for all of its customers. On April 3, 2007, the company factored, without recourse, some of its accounts receivable. On August 1, 2007, Magrath sold special order merchandise and received an interest-bearing note due April 30, 2008. Magrath uses the allowance method to account for uncollectible accounts. During 2007, some accounts were written off as uncollectible, and other accounts previously written off as uncollectible were collected.

Required

1. Explain how Magrath should account for and report the accounts receivable factored on April 3, 2007. Why is this accounting treatment appropriate?

2. Explain how Magrath should report the effects of the interest-bearing note on its income statement for the year ended December 31, 2007 and its December 31, 2007 balance sheet.

3. Explain how Magrath should account for the collection of the accounts previously written off as uncollectible.

4. What are the two basic approaches to estimating uncollectible accounts under the allowance method? What is the rationale for each approach?

Reference no: EM13341333

Questions Cloud

Find the frequency at which it is vibrating : A 70.0cm wire of mass 8.20g is tied at both ends and adjusted to a tension of 41.0N. When it is vibrating in its second overtone, find the frequency at which it is vibrating
Explain how this affected productive communication : Identify one of the "5 Errors of Thinking" that you recently observed in another or even committed yourself and explain how this affected productive communication.
Use the minus sign to enter favorable variances : Why are the standard amounts in part (1) based on the actual production for the year instead of the planned production for the year?
How much money did you earn last week : Which of the following three expressions uses the economists’ definition of money?
How magrath should account for the collection : Explain how Magrath should account for and report the accounts receivable factored on April 3, 2007 and why is this accounting treatment appropriate?
What is the electric field magnitude created by two charges : Charges of 4.0 µC and -6.0 µC are placed at two corners of an equilateral triangle with sides of 0.10 m. At the third corner, what is the electric field magnitude created by these two charges
Explain the reaction quotient q for the cell : Consider the reaction: Mg(s)+Fe2+(aq) -> Mg2+(aq)+Fe(s) at 63 degrees celsius, where [Fe2+] = 3.50M and [Mg2+] = 0.310M. The reaction quotient, Q, for the cell is 8.86x10^-2. The temperature, T, in kelvins is 336K.
Find at what frequency will force make the object vibrate : A sinusoidal force with an amplitude of 1.70 N drives the system. At what frequency will the force make the object vibrate with an amplitude of 0.440 m
Consider a situation where two microcontrollers are connect : Consider a situation where two microcontrollers are connected with a CAN network. Computer 1 generates 8-bit data packets that must be sent to Computer 2, and Computer 2 generates 8-bit data packets that must be sent to Computer 1

Reviews

Write a Review

Financial Accounting Questions & Answers

  How much suspended loss can be taken on mr mapp final

John Mapp dies with passive activity property having an adjusted basis of $50,000, suspended losses of $20,000, and a fair market value at the date of Mr. Mapp's death of $77,000. How much suspended loss can be taken on Mr. Mapp's final Form 1040..

  Illustrate what are tax consequences to both lotta and meg

Illustrate what are the tax consequences to both Lotta and Meg(show the 4 portions of the deemed transaction along with the imputed amounts) for 2011?

  Illustrate what is the company times interest earned ratio

Selected balance sheet and income statement data for Green Tea, Inc., for the year ended December 31, 2011 are below. Illustrate what is the company’s times interest earned ratio?

  Describe and compare inventories carried by both manufacture

Describe and compare the inventories carried by both manufacturing and merchandising companies. Where would these inventories be reported in the financial statements?

  Determine whether bill return-on-sales ratio has met

Bill's sales volume was 300,000 appliances with an average selling price of $500 and expenses totaling $90 million. Determine whether Bill's return-on-sales ratio has met the companywide target. Has Bill done a good or a poor job? Explain.

  What collateral or security will the company provide

What collateral or security will the company provide to make sure that any loan i make will be repaid?

  Create the required general journal entry

Create the required general journal entry to record the subsequent transactions for the Flaherty Company incurred $95,000 of factory labor costs which is paid in cash.

  What is the net impact on werner net income for quarter

What is the net impact on Werner's net income for the quarter ended June 30, 2011 as a result of this forward contract hedge of a firm commitment?

  Which companies will pay the least in income taxes

Which of the three companies will pay the least in income taxes and which method of inventory cost do you believe is superior to the others in providing information to potential investors? Explain.

  Illustrate is this policy consistent with u.s. gaap

Deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised. Illustrate is thi..

  Prepare an income statement for the month end

Why do you think the two students decided to incorporate their business rather than operate it as a partnership and prepare an income statement for the month ended May 31, 2010.

  Gradient-fraction and sampling word problems

Bear population. To estimate the size of the bear population on the Keweenaw Peninsula, conservationists captured, tagged, and released 50 bears.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd