IntermediateAccounting教科书上习题答案(byJDavidSpiceland)

IntermediateAccounting教科书上习题答案（byJDavidSpiceland）Chapter 7 Cash and ReceivablesQUESTIONS FOR REVIEW OF KEY TOPICSAACSB assurance of learning standards in accounting and business education require documentation of outcomesassessment. Although schools, departments, and faculty may approach assessment and its documentation differently, oneapproach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, wehave labeled each question, exercise and problem in Intermediate Accounting, 6e with the following AACSB learning skills:Questions AACSB Tags Exercises (cont.)AACSB Tags 7-1Reflective thinking 7-11Analytic7-2 Reflective thinking 7-12Analytic7-3Reflective thinking 7-13Analytic7-4Reflective thinking, Communications 7-14Analytic7-5Diversity, Reflective thinking 7-15Analytic7-6Reflective thinking 7-16Analytic7-7Reflective thinking 7-17Analytic7-8Reflective thinking 7-18Diversity, Analytic7-9Reflective thinking, Communications 7-19Analytic7-10Reflective thinking 7-20 Reflective thinking7-11Diversity, Reflective thinking 7-21Analytic7-12Reflective thinking 7-22Analytic7-13Reflective thinking 7-23Analytic7-14Diversity, Reflective thinking 7-24 Analytic7-15Reflective thinking, Communications 7-25Analytic7-16 Reflective thinking7-26Analytic7-17 Reflective thinking7-27 Analytic7-18 Reflective thinking7-28 Analytic7-19 Reflective thinking, Communications7-29 Analytic7-20 Diversity, Reflective thinking7-30 Reflective thinking,CommunicationsBrief Exercises 7-31 Reflective thinking,Communications 7-1Reflective thinking CPA/CMA7-2Diversity, Reflective thinking 7-1Analytic7-3Reflective thinking 7-2Analytic7-4 Analytic 7-3Reflective thinking7-5Analytic 7-4 Analytic7-6Analytic 7-5Analytic

7-7Diversity, Reflective thinking 7-6Analytic7-8Analytic 7-7Analytic7-9Analytic 7-1Reflective thinking7-10Analytic 7-2Analytic7-11Analytic 7-3Analytic7-12Analytic Problems7-13 Analytic 7-1Analytic7-14Reflective thinking 7-2Analytic7-15 Diversity, Reflective thinking 7-3Analytic7-16 Analytic 7-4 Analytic7-17 Analytic 7-5 AnalyticExercises7-6 Analytic 7-1Analytic7-7Analytic 7-2Analytic 7-8Analytic 7-3 Diversity, Analytic 7-9 Diversity, Analytic 7-4Analytic 7-10Analytic 7-5Analytic 7-11Analytic 7-6 Analytic 7-12Analytic 7-7 Analytic 7-13Analytic 7-8Analytic 7-14Analytic7-9Analytic 7-15 Analytic 7-10AnalyticQUESTIONS FOR REVIEW OF KEY TOPICSQuestion 7-1Cash equivalents usually include negotiable instruments as well as highly liquid investments that have a maturity date nolonger than three months from date of on 7-2Internal control procedures involving accounting functions are intended to improve the accuracy and reliability of accountinginformation and to safeguard the company’s assets. The separation of duties means that employees involved inrecordkeeping should not also have physical responsibility for on 7-3Management must document the company’s internal controls and assess their adequacy. The auditors must provide anopinion on management’s assessment. The Public Company Accounting Oversight Board’s Auditing Standard No. 5, whichsupersedes Auditing Standard No. 2, further requires the auditor to express its own opinion on whether the company hasmaintained effective internal control over financial on 7-4A compensating balance is an amount of cash a depositor (debtor) must leave on deposit in an account at a bank (creditor)as security for a loan or a commitment to lend. The classification and disclosure of a compensating balance depends on thenature of the restriction and the classification of the related debt. If the restriction is legally binding, then the cash will beclassified as either current or noncurrent (investments and funds or other assets) depending on the classification of therelated debt. In either case, note disclosure is appropriate. If the compensating balance arrangement is informal and nocontractual agreement restricts the use of cash, note disclosure of the arrangement including amounts involved isappropriate. The compensating balance can be included in the cash and cash equivalents category of current on 7-5Yes, IFRS and U.S. GAAP differ in how bank overdrafts are treated. Under IFRS, overdrafts can be offset against other cashaccounts. Under U.S. GAAP overdrafts must be treated as s to Questions (continued)Question 7-6Trade discounts are reductions below a list price and are used to establish a final price for a transaction. The reduced price isthe starting point for initial valuation of the transaction. A cash discount is a reduction, not in the selling price of a good orservice, but in the amount to be paid by a credit customer if the receivable is paid within a specified period of time.

Question 7-7The gross method of accounting for cash discounts considers discounts not taken as part of sales revenue. The net methodconsiders discounts not taken as interest revenue, because they are viewed as compensation to the seller for allowing thebuyer to defer on 7-8When returns are material and a company can make reasonable estimates of future returns, an allowance for sales returns isestablished. At a financial reporting date, this provides an estimate of the amount of future returns for prior sales, and involvesa debit to sales returns and a credit to allowance for sales returns for the estimated amount. Allowance for sales returns is acontra account to accounts receivable. When returns actually occur in the future reporting period, the allowance for salesreturns is on 7-9Even when specific customer accounts haven’t been proven uncollectible by the end of the reporting period, bad debtexpense properly should be matched with sales revenue on the income statement for that period. Likewise, since it’s notexpected that all accounts receivable will be collected, the balance sheet should report only the expected net realizablevalue of that asset. So, to record the bad debt expense and the related reduction of accounts receivable when the amounthasn’t been determined, an estimate is needed. In an adjusting entry, we record bad debt expense and reduce accountsreceivable for an estimate of the amount that eventually will prove uncollectible accounts are immaterial or not anticipated, or it’s not possible to reliably estimate uncollectible accounts, anallowance for uncollectible accounts is not appropriate. In these few cases, any bad debts that do arise simply are written offas bad debt expense at the time they prove s to Questions (continued)Question 7-10The income statement approach to estimating bad debts determines bad debt expense directly by relating uncollectibleamounts to credit sales. The balance sheet approach to estimating future bad debts indirectly determines bad debt expenseby estimating the net realizable value for accounts receivable that exist at the end of the period. In other words, the allowancefor uncollectible accounts at the end of the period is estimated and then bad debt expense is determined by adjusting theallowance account to reflect net realizable on 7-11A company has to separately disclose trade receivables and receivables from related parties under U.S. GAAP, but notunder on 7-12The assignment of all accounts receivable in general as collateral for debt requires no special accounting treatment otherthan note disclosure of the agreement. Question 7-13The accounting treatment of receivables factored with recourse depends on whether certain criteria are met. If the criteria aremet, the factoring is accounted for as a sale. If they are not met, the factoring is accounted for as a loan. In addition, notedisclosure may be required. Accounts receivable factored without recourse are accounted for as the sale of an asset. Thedifference between the book value and the fair value of proceeds received is recognized as a gain or a on 7-14U.S. GAAP focuses on whether control of assets has shifted from the transferor to the transferee. In contrast, IFRS focuses onwhether the company has transferred “substantially all of the risks and rewards of ownership,” as well as whether thecompany has transferred control. Under IFRS:If the company transfers substantially all of the risks and rewards of ownership, the transfer is treated as a the company retains substantially all of the risks and rewards of ownership, the transfer is treated as a secured neither conditions 1 or 2 hold, the company accounts for the transaction as a sale if it has transferred control, and as asecured borrowing if it has retained s to Questions (continued)

Question 7-15When a note is discounted, a financial institution, usually a bank, accepts the note and gives the seller cash equal to thematurity value of the note reduced by a discount. The discount is computed by applying a discount rate to the maturity valueand represents the financing fee the bank charges for the four-step process used to account for a discounted note receivable is as follows:1. Accrue any interest revenue earned since the last payment date (or date of thenote).2. Compute the maturity value.3. Subtract the discount the bank requires (discount rate times maturity valuetimes the remaining length of time from date of discounting to maturity date) from the maturity value to compute the proceedsto be received from the bank (maturity value less discount)./doc/ pute the difference between the proceedsand the book value of the noteand related interest receivable. The treatment of the difference will depend on whether the discounting is accounted for as asale or as a loan. If it’s a sale the difference is recorded as a loss or gain on the sale; if it’s a loan the difference is viewed asinterest expense or interest on 7-16A company’s investment in receivables is influenced by several related variables, to include the level of sales, the nature ofthe product or service, and credit and collection policies. The receivables turnover and average collection period ratios aredesigned to monitor on 7-17The items necessary to adjust the bank balance might include deposits outstanding (including undeposited cash),outstanding checks, and any bank errors discovered during the reconciliation process. The items necessary to adjust thebook balance mi ght include collections made by the bank on the company’s behalf, service and other charges made by thebank, NSF (nonsufficient funds) check charges, and any company errors discovered during the reconciliation s to Questions (concluded)Question 7-18A petty cash fund is established by transferring a specified amount of cash from the company’s general checking account toan employee designated as the petty cash custodian. The fund is replenished by writing a check to the petty cash custodianfor the sum of the bills paid with petty cash. The appropriate expense accounts are recorded from petty cash vouchers at thetime the fund is on 7-19When a creditor’s investment in a receivable becomes impaired, due to a troubled debt restructuring or for any other reason,the receivable is re-measured based on the discounted present value of currently expected cash flows at the loan’s originaleffective rate (regardless of the extent to which expected cash receipts have been reduced). The extent of the impairment isthe difference between the carrying amount of the receivable (the present value of the receivable’s cash flows prior to therestructuring) and the present value of the revised cash flows discounted at the loan’s original effective rate. This difference isrecorded as a loss at the time the receivable is on 7-20No. Under both U.S. GAAP and IFRS, a company can recognize in net income the recovery of impairment losses of accountsand notes EXERCISESBrief Exercise 7-1The company could improve its internal control procedure for cash receipts by segregating the duties of recordkeeping and

the handling of cash. Jim Seymour, responsible for recordkeeping, should not also be responsible for depositing Exercise 7-2Under IFRS the cash balance would be $245,000, because they could offset the two accounts. Under U.S. GAAP thebalance would be $250,000, because they could not offset the two Exercise 7-3All of these items would be included as cash and cash equivalents except the U.S. Treasury bills, which would be includedin the current asset section of the balance sheet as short-term Exercise 7-4Income before tax in 2012 will be reduced by $2,500, the amount of the cash discounts.$25,000 x 10 = $250,000 x 1% = $2,500Brief Exercise 7-5Income before tax in 2011 will be reduced by $2,500, the anticipated amount of cash discounts.$25,000 x 10 = $250,000 x 1% = $2,500Brief Exercise 7-6Estimated returns = $10,600,000 x 8% = $848,000Less: Actual returns (720,000)Remaining estimated returns $128,000Brief Exercise 7-7Singletary cannot combine the two types of receivables under U.S. GAAP, as the director is a related party. Under IFRS acombined presentation would be allowed. Brief Exercise 7-8(1) Bad debt expense = $1,500,000 x 2% = $30,000(2) Allowance for uncollectible accounts:Beginning balance $25,000Add: Bad debt expense 30,000Deduct: Write-offs (16,000)Ending balance $39,000Brief Exercise 7-9(1) A llowance for uncollectible accounts:Beginning balance $ 25,000Deduct: Write-offs (16,000)Required allowance (33,400)*

Bad debt expense $24,400(2) Required allowance = $334,000** x 10% = $33,400*Accounts receivable:Beginning balance $ 300,000Add: Credit sales 1,500,000Deduct: Cash collections (1,450,000)Write-offs (16,000)Ending balance $ 334,000** Brief Exercise 7-10Allowance for uncollectible accounts:Beginning balance $30,000Add: Bad debt expense 40,000Deduct: Required allowance (38,000)Write-offs $32,000Brief Exercise 7-11Credit sales $8,200,000Deduct: Cash collections (7,950,000)Write-offs (32,000)* Year-end balance in A/R (2,000,000)Beginning balance in A/R $1,782,000*Allowance for uncollectible accounts:Beginning balance $30,000Add: Bad debt expense 40,000Deduct: Required allowance (38,000)Write-offs $32,000 Brief Exercise 7-122011 interest revenue:$20,000 x 6% x 1/12 =$1002012 interest revenue:$20,000 x 6% x 2/12 =$200Brief Exercise 7-13Assets decrease by $7,000:Cash increases by $100,000 x 85% = $ 85,000Receivable from factor increases by($11,000 – $3,000 fee) 8,000Accounts receivable decrease (100,000)Net decrease in assets $ (7,000)Liabilities would not change as a result of this transaction.

Income before income taxes decreases by $7,000(the loss on sales of receivables)The journal entry to record the transaction is as follows:Brief Exercise 7-14Logitech would account for the transfer as a secured borrowing. The receivables remain on the company’s books and aliability is recorded for the amount borrowed plus the bank’s Exercise 7-15Under IFRS, Huling would treat this transaction as a secured borrowing, because they retain substantially all of the risks andrewards of ownership. Under U.S. GAAP, Huling would treat this transaction as a sale, because they have transferredcontrol. Note, however, that in practice we would typically expect for the entity that has the risks and rewards of ownership toalso have control over the assets, so we would expect these criteria to usually lead to the same Exercise 7-16Brief Exercise 7-17Receivables turnover = $320,000 = 5.33$60,000*($50,000 + 70,000) 2 = $60,000*Average collection = 365 = 68 daysperiod 5.33EXERCISESExercise 7-1Requirement 1Cash and cash equivalents includes:a. Balance in checking account $13,500Balance in savings account 22,100b. Undeposited customer checks 5,200c. Currency and coins on hand 580f. U.S. treasury bills with 2-month maturity 15,000Total $56,380

Requirement 2d. The $400,000 savings account will be used for future plant expansion andtherefore should be classified as a noncurrent asset, either in other The $20,000 in the checking account is a compensating balance for a long-term loan and should be classified as a noncurrent asset, either in otherassets or investments.f. The $20,000 in 7-month treasury bills should be classified as a current assetalong with other temporary se 7-2Requirement 1Cash and cash equivalents includes:Cash in bank – checking account $22,500U.S. treasury bills 5,000Cash on hand 1,350Undeposited customer checks 1,840Total $30,690Requirement 2The $10,000 in 6-month treasury bills should be classified as a current asset along with other temporary se 7-3Requirement 1: U.S. GAAPCurrent Assets:Cash $175,000Current Liabilities:Bank Overdrafts $ 15,000 Requirement 2: IFRSCurrent Assets:Cash $160,000(No current liabilities with respect to overdrafts.)Exercise 7-4Requirement 1Sales price = 100 units x $600 = $60,000 x 70% = $42,000

Requirement 2Exercise 7-4 (concluded)Requirement 3Requirement 1, using the net method:Requirement 2, using the net method:Exercise 7-5Requirement 1Sales price = 1,000 units x $50 = $50,000

Requirement 2