Bob collected $55,000 from customers who previously purchased products on account. Bob learned that one of his customers went bankrupt and can not pay him. He wrote it off for $1,500. Prepare the necessary entries
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Bob collected $55,000 from customers who previously purchased products on account. Bob learned that one of his customers went bankrupt and can not pay him. He wrote it off for $1,500. Prepare the necessary entries
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- Your client is preparing financial statements to show the bank. You know that he has incurred a refrigeration repair expense during the month, but you see no such expense on the books. When you question the client, he tells you that he has not yet paid the 1,255 bill. Your client is on the accrual basis of accounting. He does not want the refrigeration repair expense on the books as of the end of the month because he wants his profits to look good for the bank. Is your client behaving ethically by suggesting that the refrigeration repair expense not be booked until the 1,255 is paid? Are you behaving ethically if you agree to the clients request? What principle is involved here?Alan purchased shoes from Barbara on open account. Barbara sent Alan a bill for $10,000. Alan wrote back that two hundred pairs of the shoes were defective and offered to pay $6,000 and give Barbara his promissory note for $1,000. Barbara accepted the offer, and Alan sent his check for $6,000 and his note, in accordance with the agreement. Barbara cashed the check, collected on the note, and one month later sued Alan for $3,000. Is Barbara bound by her acceptance of the offer?Tom gave his daughter, Nicole, permission to access his business account online but not his principal account. Tom has just discovered that Nicole took P25,000 from the principal account (current account) hoping her father would not notice it. As Tom wrote to the manager of his local bank months ago, expressly forbidding the bank to allow his daughter to do this, he wants the bank to refund the P25,000. With respect to BDO Online Account Opening Service (“Service”) Terms and Conditions, what recommendation can you give him?
- Bob owns a collection agency. He purchases uncollected accounts receivable from other businesses at 70% of their face value and then attempts to collect these accounts. During the current year, Bob collected $75,200 on an account with a face value of $90,240. Bob has debt deduction. He has of $fill in the blank 3.Jenny operated a small shop selling hygienic supplies and bought facial masks worth $15,000 from the supplier, Amy. Jenny visited Amy’s office and gave Amy an uncrossed bearer cheque for full payment. When Amy finished her job and rushed to meet her customer by taking the MTR, she lost the cheque somewhere on the way accidentally. William found the cheque left on the floor of the MTR platform and picked it up. William was unemployed for six months and needed $15,000 to pay this month rent. After noticing the characteristic of this cheque, this was a bearer cheque. William took this bearer cheque to Isaac, his landlord, to pay this month’s rent of $15,000.Isaac deposited this cheque to her ABC Bank. The cheque was duly cleared through the Isaac’s bank and paid by Jenny’s CDE Bank. a) Explain how to apply “Holder in Due Course” (HIDC) in this case. b) Who is the true owner of this cheque from three parties of Amy, William and Isaac?c) If the cheque was crossed and the words “not…ASLEY is in the business of purchasing accounts receivable from businesses at a discount and then collecting them. Last year, she purchased a $30,000 account receivable for $25,000. This year, the account was settled for $25,000. How much loss can Peggy deduct and in which year? a.$5,000 for the prior year. b.$5,000 for the prior year and $5,000 for the current year. c.$5,000 for the current year. d.$-0- for the current year.
- Jane Marks has a restaurant in which she accepts credit cards and checks.Several of the places that Jane shops now accept debit cards and do notaccept checks. Jane’s banker explained that a debit card would immediatelytransfer money into her account, but it would cost $50 per monthfor the equipment and bank charges. Although she requires proper identification,Jane loses approximately $590 a year as a result of bad checks.She also determined that on average, she loses 115 days of interest onall checks because the banks are closed on 11 holidays and weekends (52 weeks * 2 weekend days = 104 + 11 holidays). Jane currently earns3 percent interest on her bank accounts and accepts an average of $2,000 aday in checks.a. What is the total annual cost to Jane for the debit card service?b. What is the benefit?c. Should Jane implement the system?Althea writes a check to Handy Dan's Home Repair for $59.75 to cover the cost of having a window repaired in her home and gives the check to Dan, the owner of Handy Dan's Home Repair. Dan alters the check by changing the amount to $559.75. Dan then takes the check to Home Federal Savings and Loan, the bank on which the check is drawn, and cashes the check. This, of course, results in an extra $500 being withdrawn from Althea's account. Home Federal Savings and Loan will be responsible for: issuing a stop payment order on the check. debiting Althea's account $559.75, the entire amount of the check. debiting Althea's account for nothing. Because the check was altered, Althea is not entitled to any reimbursement. debiting Althea's account $500.Sally is in the business of purchasing accounts receivable. Last year, Sally purchased an account receivable with a face value of $80,000 for $60,000. During the current year, Sally settled the account, receiving $65,000. Determine the maximum amount of the bad debt deduction for Sally for the current year. If an amount is zero, enter "0". Sally's basis in the account receivable is $fill in the blank 1 . Therefore, she has a bad debt deduction of $fill in the blank 2 and income of $fill in the blank 3 .
- James Cooper sells memberships to the Atlanta Symphony Association. TheAssociation’s procedure requires that Cooper prepare and give each customer a receipt for eachmembership sold. The receipt forms are prenumbered. Cooper is having personal financialproblems, and he kept the $500 cash received from a customer for a new membership. To hidehis theft, Cooper destroyed the Association’s copy of the receipt that he gave to the customer.What will alert manager Terry Reynolds that something is wrong?Ann receives an unsolicited credi card in the mail and tosses it on her desk. Without Ann's permission, her roommate uses the card to spend $1000 on new clothes. Ann is liable for a$1000, b $500, c $50, d$0Jake’s grandmother paid for their lunch with a credit card. The waitperson brought him back the card, and he signed the receipt. Several charges appeared on his grandmother’s credit card bill that he had not made a month later. Identify the victim and the violator. What term describes what the waitperson did? What should Jake advise his grandmother? Please answer with more than 200 words
