What total amount should be reported as current trade and other receivables?

Valiant Company reported the following analysis of current receivables at year-end:

Trade accounts receivable	2,000,000
Allowance for doubtful accounts	(100,000)
Claim against shipper for goods lost in transit in November	300,000
Selling price of unsold goods sent by valiant on consignment at 150% of cost and not included in ending inventory	600,000
Security deposit on lease of warehouse	200,000
Total	3,000,000

Solutions

Expert Solution

A receivable is classified as current if it is expected to be collected within the lower of 1 year or the operating cycle. Hence,, the claim against the shipper may be considered as a current receivable but the lease deposit is non-current. The unsold consigned goods are in the possession of the consignee but are the property of the consignor hence the unsold consigned goods should be included in inventory at cost, not in receivables at their sales price.

Accordingly, current net receivables should equal $2,200,000 [($2,000,000 – $100,000) net trade receivables + $300,000 claim].

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

What amount should be reported as current tax expense for the current year? What amount should...

What amount should be reported as current tax expense for the current year? What amount should be reported as income tax payable for the current year? What amount should be reported as total income tax expense for the current year?

The receivables allowance reduces the reported trade receivables balance to reflect uncertainties over collectability. Explain the...

The receivables allowance reduces the reported trade receivables balance to reflect uncertainties over collectability. Explain the concept of allowances for irrecoverable receivable and describes the allowances for receivables information which could be given in annual report.

2 For the current year, the average settlement period for trade receivables at Sisi Company was...

2 For the current year, the average settlement period for trade receivables at Sisi Company was 60 days. This figure is much higher than in previous years. What factors might have contributed to this change in the ratio? (6)

Other things equal, what is the likely impact of a U.S. trade deficit on the current...

Other things equal, what is the likely impact of a U.S. trade deficit on the current account? foreign savings if domestic investment is greater than domestic saving? foreign savings if domestic investment is less than domestic saving?

Estimate the amount of uncollectible receivables.

Mercy Hospital has the following balances on December 31, 2021, before any adjustment Accounts Receivable = $70,000; Allowance for Uncollectible Accounts = $1,400 (credio. Mercy estimates uncollectible accounts based on an aging of accounts receivable as shown below. Required: 1. Estimate the amount of uncollectible receivables. 2. Record the adjusting entry for uncollectible accounts on December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) 3. Calculate net accounts receivable.

What is the main use of computerized age analysis of trade receivables?

A firm has: Amount ($ millions) Cash 50 Other Current Assets 96 Current Liabilities 62 What...

A firm has: Amount ($ millions) Cash 50 Other Current Assets 96 Current Liabilities 62 What is its Net Working Capital?

What is meant by Other Current Asset or Other Current Liability?

Balance the budget sheet: Current Assets: Total Current Assets: Property and equipment: Other assets: Total Assets:...

Balance the budget sheet: Current Assets: Total Current Assets: Property and equipment: Other assets: Total Assets: Current liabilities: Total Current Liabilities: Total Liabilities: Share holders equity Total Liabilities & Share holders Equity: Instructions: Please place the following items and amounts in their correct locations on the balance sheet Accounts payable $30,000 Accounts receivable $20,000 Investments $10,000 Common stock $10,000 Additional paid-in capital $20,000 Prepaid expense $4,000 Cash and cash equivalents $100,000 Deferred revenue $2,000 Notes payable $10,000 Inventory $15,000 Retained...

The total amount of stockholders' equity reported on the balance sheet is often: Select one: a....

The total amount of stockholders' equity reported on the balance sheet is often: Select one: a. not accurate due to too many estimates b. all of the above c. not representative of the value of the company to its stockholders d. too hard for the average investor to locate

Subjects