PPT-Chapter 8 Receivables, Bad Debt Expense, and Interest Revenue

PowerPoint Author Brandy Mackintosh CA Learning Objective 81 Describe the tradeoffs of extending credit Pros and Cons of Extending Credit Disadvantages Increased wage costs Bad debt costs. . . By Hema Moryani. Basics of Debt . They are contracts in which one party lends money to another at certain pre determined terms. Adjustments, Financial Statements, and Financial Results. PowerPoint Authors:. . Brandy Mackintosh. Lindsay . Heiser. Learning Objective 4-1. Explain why adjustments are needed.. Solution: . Adjustments are made to the accounting records at the end of the period to state assets, liabilities, revenues, and expenses at appropriate amounts. . Adjustments, Financial Statements, and Financial Results. PowerPoint Authors:. . Brandy Mackintosh. Lindsay . Heiser. Learning Objective 4-1. Explain why adjustments are needed.. Solution: . Adjustments are made to the accounting records at the end of the period to state assets, liabilities, revenues, and expenses at appropriate amounts. . Securitizations. Catherine . Shakespeare. How does a securitization work?. Assets. Account Receivables A. Account Receivables B. Account Receivables C. Pooled. AAA Tranche. Mezzanine A. Retained Interest. Receivables, Bad Debt Expense, and Interest Revenue. PowerPoint Authors:. Brandy Mackintosh. Lindsay . Heiser. Learning Objective 8-1. Describe the trade-offs of extending credit.. Pros and Cons of Extending Credit. Adjustments, Financial Statements, and Financial Results. PowerPoint Authors:. . Brandy Mackintosh. Lindsay . Heiser. Learning Objective 4-1. Explain why adjustments are needed.. Solution: . Adjustments are made to the accounting records at the end of the period to state assets, liabilities, revenues, and expenses at appropriate amounts. . Receivables. , and Cash. Chapter 6. McGraw-Hill/Irwin. © 2009 The McGraw-Hill Companies, Inc.. When companies allow customers to purchase merchandise on an . open account. , the customer promises to pay the company in the future for the purchase.. Chapter 7. Copyright © 2016 McGraw-Hill Education.  All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.. Wild, Shaw, and . Chiappetta. Financial & Managerial Accounting. This adjustment computes the interest component of the revenue requirement. The interest expense (component) is computed by multiplying the rate base by weighted cost of debt. The calculated interest expense is then compared against the interest expense used by the Company in its computation of test year income tax expense. The tax effect of the difference in interest expense is the adjustment for interest synchronization. The effect of this adjustment is to ensure that the revenue requirement reflects the tax savings generated by the interest component of the revenue requirement. . PowerPoint . Author:. . Brandy Mackintosh, CA. Learning Objective 8-1. Describe the trade-offs of extending credit.. Pros and Cons of Extending Credit. Disadvantages. Increased wage costs.. Bad debt costs.. In Perfect Markets. Capital Structure is irrelevant. Risks of debt and equity (beta’s) are affected by leverage. EPS risk changes with capital structure. WACC (used to calculate firm value) not affected. . . By Hema Moryani. Basics of Debt . They are contracts in which one party lends money to another at certain pre determined terms. 16th . Edition. Kieso . ●. . Weygandt . ●. . Warfield. . Describe . the nature of bonds and indicate the accounting for bond issuances. .. Describe the accounting for the extinguishment of debt.. LO. 1. Record the reversing entry for accrued revenue.. LO. 2. Record an entry to receive payment on a note receivable with accrued interest.. LO. 3. Calculate accrued interest expense.. LO. 4.