How should kimmel account for the sales discount at the date

Assignment Help Operation Management

Reference no: EM131845702

Kimmel Company uses the net method of accounting for sales discounts. Kimmel also offers trade discounts to various groups of buyers.

On August 1, 2017, Kimmel sold some accounts receivable on a without recourse basis. Kimmel incurred a finance charge.

Kimmel also has some notes receivable bearing an appropriate rate of interest.

The principal and total interest are due at maturity. The notes were received on October 1, 2017, and mature on September 30, 2019. Kimmel's operating cycle is less than one year.

a) Using the net method, how should Kimmel account for the sales discounts at the date of sale? What is the rationale for the amount recorded as sales under the net method?

b) Using the net method, what is the effect on Kimmel's sales revenues and net income when customers do not take the sales discounts?

c) What is the effect of trade discounts on sales revenues and accounts receivable? Why?

d) How should Kimmel account for the accounts receivable factored on August 1, 2017? Why?

e) How should Kimmel account for the note receivable and the related interest on December 31, 2017? Why?

Reference no: EM131845702

Questions Cloud

How do you insert a row in a table in sql : What is SQL? How do you create a table in SQL? How do you insert a row in a table in SQL? How do you get data from a table in SQL?

What kind of discretionary bnefits would help companies : What kind of discretionary bnefits would help companies to have better control over absenteeism? Discuss with examples

Review problem on colors and designs of products : Colors and designs of products are chosen so that they appeal to particular target groups. Colors are used to attract male or female consumers.

Which generation of peacekeeping does interfet represent : Answer each of the following discussion questions and interact with at least one of your classmates:

How should kimmel account for the sales discount at the date : Using the net method, what is the effect on Kimmel's sales revenues and net income when customers do not take the sales discounts?

What database tables and fields do you think are needed : Go to half website and look up a popular movie that they sell as a DVD. What database tables and fields do you think are needed to represent the data for a DVD?

Explain the implications of the absolute threshold : Many studies have shown that our sensory detection abilities decline as we grow older. Discuss the implications of the absolute threshold for marketers.

How do transformational and transactional leadership differ : How do transformational and transactional leadership differ? Give an example of each in health care and when it might be preferable to the other.

List the most important accomplishments of the un : List the most important accomplishments of the UN peacekeeping missions in East Timor and explain in your own words why those particular accomplishments

User Account

All Pages