Receivables and Short-Term Investments课件.ppt

;Learning Objective 1;Short-Term Investments;Held-to-Maturity Investments;Trading Investments;Short-Term Investments;Short-Term Investments;Short-Term Investments;Reporting on the Balance Sheetand the Income Statement;Accounts and Notes Receivable;Accounts Receivable;Learning Objective 2;Establishing Internal ControlOver Accounts Receivable;Learning Objective 3;The Allowance Method;The Allowance Method;Methods for Estimating Uncollectibles;Percent-of-Sales;Percent-of-Sales;Percent-of-Sales;Aging-of-Receivables;Aging-of-Receivables;Aging-of-Receivables;Aging-of-Receivables;Writing OffUncollectible Accounts;Writing OffUncollectible Accounts;Comparing the Methods;Direct Write-Off Method;Direct Write-Off Method;Learning Objective 4;Notes Receivable;Notes Receivable;Accounting for Notes Receivable;Interest = Principal × Rate × Time;Accounting for Notes Receivable;How to Speed Up Cash Flow; Cash 97,000 Financing Expense 3,000 Sales Revenue 100,000 To record a credit card sale of $100,000 and a 3% financing fee;How to Speed Up Cash Flow;How to Speed Up Cash Flow;Learning Objective 5;One day’s sales = Net sales ÷ 365 days $10,860 ÷ 365 = $29.75 per day Days’ sales in average accounts receivable = Average net accounts receivable ÷ One day’s sales [(2,534 + 2,432) ÷ 2] ÷ 29.75 = 83 days A smaller number indicates a quick conversion to cash. ;A stringent test of liquidity Measures entity’s ability to pay its current liabilities immediately (Cash + Short-term investments + Net current receivables) ÷ Total current liabilities (4,449 + 1,438 + 2,432) ÷ 3,916 = 2.12 This ratio value is extremely high and indicates great liquidity for this company. ;Reporting on theStatement of Cash Flows;End of Chapter 5