Beginning Inventory

+ Net Purchases

Goods Available for Sale (Some professors care about this... some don't)

Sales Revenue

– Sales Returns and Allowances

– Sales Discounts

Net Sales

Total Credit Sales

– Sales Returns and Allowances

– Sales Discounts

Net Credit Sales

Ending Allowance for Bad Debts = Ending A/R * Estimated %

(Balance Sheet Method)

Bad Debt Expense = Net Credit Sales * Estimated %

(Income Statement Method)

Accounts Receivable

– Allowance for Bad Debts (or Allowance for Uncollectible Accounts)

Net Realizable Value (or Net Accounts Receivable)

Maturity Value = Principal + Interest

Face Value

* Annual Percentage Rate

* (Months Outstanding / 12) You could use (Days Outstanding / 360) instead of months

Interest Expense (or Revenue)