Presentation is loading. Please wait.

Presentation is loading. Please wait.

Uncollectible Accounts

Similar presentations


Presentation on theme: "Uncollectible Accounts"— Presentation transcript:

1 Uncollectible Accounts
Chapter Uncollectible Accounts

2 Reopening an Account Previously Written Off – 2 Steps
Lesson 14-2 Step 1: Before you can record the payment, you have to create a journal entry to put the account balance back into the account. Once it is posted, you can make a journal entry in the cash receipts journal to show receipt of the payment. (Payment shown on the next slide.) March 9. Received cash in full payment of Edmonds Hospital’s account, previously written off as uncollectible, $ Memorandum No. 71 and Receipt No. 695.

3 Recording Cash Received for an Account Previously Written Off
Lesson 14-2 Recording Cash Received for an Account Previously Written Off Step 2: Now that the account has a balance back in it, you can record a payment to the account. March 9. Received cash in full payment of Edmonds Hospital’s account, previously written off as uncollectible, $ Memorandum No. 71 and Receipt No. 695.

4 Accepting a Note Receivable from a Customer—Which Journal?
Lesson 14-3 Accepting a Note Receivable from a Customer—Which Journal? March 18. Accepted a 90-day, 8% note from Skinner College for an extension of time on its account, $2, Note Receivable No. 6.

5 Interest on Promissory Notes
Lesson 14-3 Interest on Promissory Notes An amount paid for the use of money for a period of time is called interest. Principal × Annual Interest Rate Time as Fraction of a Year = Interest for Fraction of Year $2,578.35 × 8% 90/360 = $51.57 The amount that is due on the maturity date of a note is called the maturity value. Principal + Interest = Maturity Value $2,578.35 + $51.57 = $2,629.92

6 Maturity Date of Promissory Notes
Lesson 14-3 Maturity Date of Promissory Notes 1 Number of days of the first month 2 Days remaining after this month Days from the Month Days Remaining Term of the Note 90 March 18–March 31 13 77 April 30 47 May 31 16 June 1–June 16 4 Days remaining for the last month

7 Collecting Principal and Interest on a Note Receivable
Lesson 14-3 Collecting Principal and Interest on a Note Receivable June 16. Received cash for the maturity value of Note Receivable No. 6, a 90-day, 8% note: principal, $2,578.35, plus interest, $51.57; total, $2, Receipt No. 782.

8 Recording a Dishonored Note Receivable
Lesson 14-3 Recording a Dishonored Note Receivable June 3. Stout Company dishonored Note Receivable No. 4, a 60-day, 8% note, maturity value due today: principal, $3,000.00; interest, $40.00; total, $3, Memorandum No. 98. Charge the note plus the interest due.

9 I appreciate your extra work. Good luck on the quiz and test!


Download ppt "Uncollectible Accounts"

Similar presentations


Ads by Google