| Course | ACC-2010 Intermediate Accounting I |
|---|---|
| Module | Module 4 |
| Paper type | Written Assignment 4: time value of money, cash and receivables |
| Length | About 743 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Bachelor of Science in Business Administration |
| Updated | October 2026 |
Free sample paper for ACC 2010 Module 4
Kittatinny Outdoor Gear, Inc.: Present Values, a December Bank Reconciliation and an Aging of Receivables
Student Name
Bachelor of Science in Business Administration, Thomas Edison State University
ACC-2010: Intermediate Accounting I
Mentor Name
Month Day, Year
Kittatinny Outdoor Gear, Inc.: Present Values, a December Bank Reconciliation and an Aging of Receivables
Introduction
Receivables are promises of future cash, and promises to be paid later are worth less than cash today (Spiceland et al., 2020). This assignment uses present value to measure a long-term note and two payment streams, then turns to the controls and estimates that keep cash and receivables honest on the balance sheet at December 31, 2025.
Part A: Time Value of Money
1. At the start of 2025, a Pennsylvania outfitter took Kittatinny's showroom display racks in exchange for a promise to pay $60,000 at the end of 2027, with no interest written into the note. The market rate for similar loans is 8%. The present value of $1 for three periods at 8% is 0.79383, so the note's present value is $60,000 x 0.79383 = $47,629.80, rounded to $47,630. Kittatinny records sales revenue of $47,630, not $60,000, because the remaining $12,370 is interest it will earn over three years. Interest revenue for 2025 is $47,630 x 8% = $3,810, which raises the note's carrying amount to $51,440.
2. A distributor offers to pay $10,000 a year for five years for exclusive rights to sell Kittatinny tents in Canada. At 6%, the present value of an ordinary annuity factor for five periods is 4.21236, so payments at the end of each year are worth $42,123.60 today.
3. If the distributor pays at the beginning of each year instead, the stream is an annuity due. Its factor is 4.21236 x 1.06 = 4.46510, giving a present value of $44,651.00. Each payment arrives a year sooner, so the stream is worth $2,527.40 more. If Kittatinny records the contract at present value, the difference between the payments received and the amount recorded is interest earned over the five years, the same logic as the dealer's note. Choosing the right factor depends entirely on timing, which is why a timeline belongs at the top of every problem.
Part B: Bank Reconciliation at December 31
The operating account's December statement shows a balance of $92,400. The general ledger shows $82,155.
Only the book side items require journal entries, because they are things the bank knows and the company has not yet recorded: debit Cash $4,120, credit Notes Receivable $4,000 and Interest Revenue $120; debit Bank Service Charge Expense $45 and Accounts Receivable $1,200 for the NSF check; and debit Accounts Payable $180, credit Cash $180, to correct the supplier payment. The deposit in transit and outstanding checks will clear on their own in January. The reconciliation also works as a control: the person who prepares it should not be the person who writes checks or records cash receipts, so that an error like the $180 understatement is caught by someone with no reason to hide it.
| Bank side | Amount |
|---|---|
| Balance per bank statement | $92,400 |
| Add deposit in transit | 6,800 |
| Deduct outstanding checks | (14,350) |
| Adjusted bank balance | $84,850 |
| Book side | Amount |
| Balance per books | $82,155 |
| Add note collected by bank, with interest | 4,120 |
| Deduct service charge | (45) |
| Deduct customer check returned NSF | (1,200) |
| Deduct error: check for $1,860 recorded as $1,680 | (180) |
| Adjusted book balance | $84,850 |
Part C: Aging of Accounts Receivable
Receivables at December 31 total $212,500.
Before adjustment, the allowance has a $1,400 debit balance because write-offs during the year exceeded the allowance set up at the end of 2024. To reach the $9,000 credit the aging calls for, the adjusting entry has to cover the $1,400 deficit first, so Kittatinny charges $10,400 to bad debt expense and credits the allowance by the same amount. After the entry, receivables appear on the year-end balance sheet at $203,500 net of the allowance.
Under the current expected credit loss standard, companies estimate losses over the whole life of receivables, using past experience adjusted for current conditions and reasonable forecasts (Financial Accounting Standards Board [FASB], 2016). An aging schedule remains an acceptable way to do that for short-term trade receivables, but Kittatinny's percentages should reflect whether outdoor retailers, its main customers, are expected to struggle next year. That judgment is also why the allowance attracts scrutiny: McNichols and Wilson (1988) found evidence that managers used the bad debt provision to manage reported earnings.
| Age | Balance | Estimated uncollectible | Required allowance |
|---|---|---|---|
| Current | $150,000 | 2% | $3,000 |
| Up to a month overdue | 38,000 | 5% | 1,900 |
| 31 to 60 days past due | 16,000 | 15% | 2,400 |
| Over 60 days past due | 8,500 | 20% | 1,700 |
| Total | $212,500 | 4.2% overall | $9,000 |
References
Financial Accounting Standards Board. (2016). Financial instruments, credit losses (Topic 326): Measurement of credit losses on financial instruments (Accounting Standards Update No. 2016-13).
McNichols, M., & Wilson, G. P. (1988). Evidence of earnings management from the provision for bad debts. Journal of Accounting Research, 26, 1-31. https://doi.org/10.2307/2491176
Spiceland, J. D., Nelson, M. W., & Thomas, W. B. (2020). Intermediate accounting (10th ed.). McGraw-Hill Education.
What the ACC 2010 Module 4 instructions ask for
Module 4 combines the time value of money with cash and receivables, and Written Assignment 4 draws on both. The items are numbered textbook exercises and problems from the time value and receivables chapters, and each must show its factors, timelines and entries. Time value items usually ask for present or future values of single sums and annuities, sometimes inside an accounting measurement such as a note. On the receivables side, look for a reconciliation of the bank statement, an allowance estimate by aging or a sales percentage, and notes from customers. The problems here are original and follow that pattern. Read whether interest is stated or implied before choosing a measurement.
How the ACC 2010 Module 4 example is put together
Part A works three present value problems, each with the factor, the arithmetic and the accounting consequence, and the first shows why a non-interest-bearing note is recorded at present value with interest earned over time. Part B uses a two-column reconciliation so the bank and book sides each reach the same adjusted balance, then states which items require entries and records them. Part C presents the aging schedule as a table, explains the debit balance that makes bad debt expense larger than the required allowance and closes with the current expected loss standard and a research finding on why the estimate deserves scrutiny. Consistent figures tie to the balance sheet in Written Assignment 2.
Where the marks sit in the ACC 2010 Module 4 rubric
As one of the five written assignments sharing 30 percent of the grade, Written Assignment 4 is graded for correct answers and complete work. Mentors check that present value factors match the periods and rate, that annuity due problems are distinguished from ordinary annuities, that both sides of a reconciliation reach the same adjusted balance and that only book side items are journalized. On receivables, they look for the right allowance balance, the correct treatment of any existing balance in the allowance and the resulting expense. Showing the formula or factor for each calculation is the surest way to earn partial credit when an arithmetic slip creeps in.
Common ACC 2010 Module 4 mistakes, and how to avoid them
Three mistakes cost the most points on this assignment. First, using an ordinary annuity factor for payments made at the beginning of each period. Second, journalizing bank side items such as deposits in transit; only the book side needs entries. Third, booking the whole target allowance as this year's expense while forgetting the credit or debit balance the account already carries. Draw a timeline for each time value problem before choosing a factor, and keep at least five decimal places in factors, since rounding early can move an answer by dollars. In reconciliations, decide for each item whether the bank or the company already knows about it. Forward your Module 4 problem numbers and a writer will set them out with timelines and schedules, the first one at no charge.
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ACC 2010 Module 4 questions, answered
Where can I find a free ACC 2010 Module 4 sample paper?
Kittatinny's note, annuities, bank reconciliation and receivables aging are all solved on this page: present values of a note and two annuities, a bank reconciliation with its entries and an aging of receivables with bad debt expense.
How is a non-interest-bearing note recorded?
At the present value of its face amount at the market rate; the difference is recognized as interest revenue over the note's life.
What is the difference between an ordinary annuity and an annuity due?
Timing: an ordinary annuity pays at each period's close, an annuity due at its start, so the due version has one more period of earning power and a higher present value.
Which bank reconciliation items need journal entries?
The adjustments on the company's side: service charges, returned customer checks, amounts the bank collected for you and mistakes in your own ledger.
How do you compute bad debt expense with the aging method?
Find the required allowance from the aging schedule, then record the amount needed to move the allowance from its current balance to that requirement.