蘇州市離休干部生活待遇一覽表(1)ppt課件

1、Receivables and Short-TermInvestments 江西不孕不育醫(yī)院 srsgyyLearning Objective 1Understand short-terminvestments.Short-Term InvestmentsShort-term investments are investments thata company plans to hold for one year or less. Held-to-maturity securities Trading investments Available-for-sale investmentsHeld-

2、to-maturity and available-for-salesecurities could also be long-term.Short-Term InvestmentsHeld-to-maturity investments aresecurities that the investor expectsto hold until their maturity date.They earn interest revenue for the investor.Accounting for these securities is thesame as accounting for no

3、tes receivable.Short-Term InvestmentsTrading InvestmentsSuppose that Oracle Corporation purchasesFord Motor Company stock on May 18,paying $100,000, with the intention ofselling the stock within a few months.Short-Term InvestmentsMay 18Short-Term Investment100,000Cash100,000Purchased investmentOn Ma

4、y 27, Oracle receives a cashdividend of $4,000 from Ford.Short-Term InvestmentsMay 27Cash 4,000Dividend Revenue 4,000Received cash dividendOracle fiscal year ends on May 31, andthe investment in Ford has a currentmarket value of $102,000 on this date.Short-Term InvestmentsMay 31Short-Term Investment

5、2,000Unrealized Gain on Investments 2,000Adjusted investment to market valueShort-Term InvestmentsCost100,000Adjustment to market value 2,000Balance102,000Reporting on the Balance Sheetand the Income StatementBalance SheetCurrent Assets:$ XXXCash XXXShort-term investments at market value 102,000Acco

6、unts receivable XXXIncome StatementRevenues$ XXXExpenses XXXOther revenues, gains, and (losses):Interest revenue XXXDividend revenue 4,000Unrealized gain on investment 2,000Accounts and Notes ReceivableReceivables are the third most liquid asset after cash and short-term investments.Receivables are

7、monetary claims against others.Accounts receivableTypes of ReceivablesNotes receivableOther receivables(miscellaneous)Accounts ReceivableGENERAL LEDGERAccounts ReceivableBal. 9,000ACCOUNTS RECEIVABLESUBSIDIARY RECORDAstonBal. 5,000HarrisSalazarBal. 1,000Bal. 3,000Learning Objective 3Use the allowanc

8、e methodfor uncollectible receivables.Accounting forUncollectible AccountsSelling on credit creates both a benefit and a cost:The benefit:Customers who cannot pay cash immediatelycan buy on credit, so company profitsrise as sales increase.The cost:The company will be unable to collectfrom some credi

9、t customers.The Allowance MethodThe allowance method records collectionlosses on the basis of estimates, not waitingto see which customers will not pay.The Allowance for Uncollectible Accounts(Allowance for Doubtful Accounts) is acontra account to Accounts Receivable.The Allowance MethodBalance Shee

10、t (partial)Accounts receivable$10,000Less: Allowance for uncollectible accounts 900Accounts receivable, net$ 9,100Income Statement (partial)Expenses:Uncollectible-account expense$ 900Methods for Estimating UncollectiblesPercent-of-salesAging-of-ReceivablesPercent-of-SalesIt computes uncollectible-ac

11、countexpense as a percentage of revenue.This method is also called theincome-statement approach.Percent-of-SalesThe credit department estimates thatuncollectible-account expense is 5% oftotal revenues, which were $11 billion for 20 x1.Dec 31 (in millions)Uncollectible-Account Expense($11,000 0.05)55

12、0Allowance for Uncollectible Accounts550Recorded expense for the yearPercent-of-SalesDecember 31, 20 x1 (in millions)After AdjustmentAccounts ReceivableBal. 11,000Allowance forUncollectible Accounts550Aging-of-ReceivablesThis method is a balance-sheet approachbecause it focuses on accounts receivabl

13、e.Individual receivables from specificcustomers are analyzed based onhow long they have been outstanding.Aging-of-ReceivablesDecember 31, 20 x1 (in millions)Accounts ReceivableBal. 2,835Allowance forUncollectible Accounts120Accounts before the year-end adjustment:Aging-of-ReceivablesDaysOverdue 1-30

14、 days31-60 days61-90 days91 + daysAccountsReceivable$1,555 750 311 219$2,835Estimated %Uncollectible 6102079Allowance forUncollectibleAccounts$ 93 75 62 173$403Aging the Accounts ReceivableAging-of-ReceivablesAccounts after the year-end adjustment:Uncollectible-Account Expense283Allowance for Uncoll

15、ectible Accounts ($403 $120)283Recorded expense for the yearDecember 31, 20 x1 (in millions)Accounts ReceivableBal. 2,835Allowance forUncollectible Accounts120Adj.283403Writing OffUncollectible AccountsSuppose that early in 20 x2, the creditdepartment determines that the companycannot collect from t

16、wo customers.These accounts must be written off.How?Writing OffUncollectible AccountsAllowance for Uncollectible Accounts100Accounts Receivable Customer A61Accounts Receivable Customer B39Wrote off uncollectible receivablesDirect Write-Off MethodAn account is written offonly when it is decided that

17、a specificcustomers receivable is uncollectible.January 2, 20 x4Uncollectible-Account Expense2,000Accounts Receivable Jones2,000Wrote off a bad accountDirect Write-Off MethodThis method is defective for two reasons:Since no allowance for uncollectiblesis established, assets are overstatedon the bala

18、nce sheet.1It causes a poor matching of uncollectible-account expense against revenueand overstates net income.2Learning Objective 4Account for notes receivable.Notes ReceivableNotes receivable are more formalthan accounts receivable.The creditor has a note receivable.The debtor has a note payable.N

19、oteNotes ReceivableThe principal amount of the note isthe amount borrowed by the debtor.The maker pays the payee the maturity value.The maturity value includes principal plus interest.Notes Receivable PROMISSORY NOTE $1,000 August 31, 20 x5AmountFor value received, I promise to pay to the order ofCo

20、ntinental bankChicago, IllinoisOne thousand and no/100Dollarson February 28, 20 x6plus interest at the annual rate of 9 percentPrincipalInterest period startsPayee(creditor)InterestrateInterest period endson the maturity dateMaker (Debtor)Accounting for Notes ReceivableContinental Bank entry is as f

21、ollows:August 31, 20 x5Note Receivable1,000Cash1,000Made a loanHow much interest revenueis accrued at December 31?Interest = Principal Rate TimeAccounting for Notes ReceivableDecember 31, 20 x5Interest Receivable30Interest Revenue30Accrued interest revenue$1,000 9% 4/12 = $30Accounting for Notes Rec

22、eivableFebruary 28, 20 x6Cash1,045Note Receivable1,000Interest Receivable 30Interest Revenue ($1,000 9% 2/12) 15Collected note at maturityThe bank collects the note on February 28, 20 x6.Learning Objective 5Use the acid-test ratio andthe days sales in receivablesto evaluate financial position.Report

23、ing Assets inOrder of LiquidityCURRENT ASSETS 2001 2000Cash and cash equivalents$ 4,449$ 7,429Short-term investments 1,438 333Trade receivables, net 2,432 2,534Prepaid expenses 644 587Total current assets$ 8,963$10,883Long-term investments 110Property, net 975 935Other assets 1,092 1,149Total assets$11,030$13,077CURRENT LIABILITIESTotal current liab