Question 1

Beatrice Equipment
Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2017,the following data are available:
 $\begin{array}{lr}
\text { Sales } & \$ 2,400,000 \
\text { Sales returns and allowances } & 60,000 \
\text { Accounts Receivable-January 1, 2017 } & 270,000 \
\text { Allowance for doubtful accounts-January 1, 2017 } & 25,600 \
\text { Collections during 2017 } & 2,426,300 \
\text { Accounts written off as uncollectible during 2017 } & 23,700
\end{array}$
-Refer to the data for Beatrice Equipment.
Assume that Beatrice Equipment estimates bad debts at 1% of net credit sales.
 A) What amount will Beatrice Equipment record as bad debts expense for 2017 ?

B) How much is the net realizable value of accounts receivable reported on Beatrice Equipment's balance sheet at December 31,2017 ?

Accepted Answer

The answer of Beatrice Equipment
Beatrice Equipment sells merchandise only on...

Question 2

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31.

Required
Identify the maturity date of the note.

Accepted Answer

The answer of Cyprus Corp.received a 7%,six-month promissory note with...

Question 3

Beatrice Equipment
Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2017,the following data are available:
?? $\begin{array}{lr}
\text { Sales } & \$ 2,400,000 \
\text { Sales returns and allowances } & 60,000 \
\text { Accounts Receivable-January 1, 2017 } & 270,000 \
\text { Allowance for doubtful accounts-January 1, 2017 } & 25,600 \
\text { Collections during 2017 } & 2,426,300 \
\text { Accounts written off as uncollectible during 2017 } & 23,700
\end{array}$
-Refer to the data for Beatrice Equipment.
?
Determine the balance of Accounts Receivable at December 31,2017.

Accepted Answer

The answer of Beatrice Equipment
Beatrice Equipment sells merchandise only on...

Question 4

Beatrice Equipment
Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2017,the following data are available:
 $\begin{array}{lr}
\text { Sales } & \$ 2,400,000 \
\text { Sales returns and allowances } & 60,000 \
\text { Accounts Receivable-January 1, 2017 } & 270,000 \
\text { Allowance for doubtful accounts-January 1, 2017 } & 25,600 \
\text { Collections during 2017 } & 2,426,300 \
\text { Accounts written off as uncollectible during 2017 } & 23,700
\end{array}$
-Refer to the data for Beatrice Equipment.
Assume that Beatrice Equipment estimates bad debts on an aging analysis,and the aging schedule indicates that $28,000 of the December 31,2017,accounts receivable will be uncollectible.
 A) What amount will Beatrice Equipment recognize as bad debts expense for 2017 ?

B) How much is the net realizable value of the receivables to be reported on Beatrice Equipment's balance sheet at December 31,2017?

Accepted Answer

The answer of Beatrice Equipment
Beatrice Equipment sells merchandise only on...

Question 5

Analyze the adjustments needed for the following transactions involving notes payable for Marcus Company,whose fiscal year ends September 30.Round all numbers to the nearest penny.
?
 $\begin{array}{llr}
  \text { Sept. 10 } &  \text {  Received cash for a 60 -day, $ 12 \%, \$ 10,000 $ note payable. Interest is in addition to the face val } \
\quad\quad30 & \text { Made end-of-year adjusting entry to accrue interest expense for the note. } \
 \text {Nov. 9  } &  \text {  Paid amount due on the note plus interest. } 
\end{array}$

Accepted Answer

The answer of Analyze the adjustments needed for the following...

Question 6

Hawthorne Industries' comparative balance sheets included accounts receivable of $221,400 at December 31,2016,and $205,900 at December 31,2017.Sales reported on Hawthorne's 2017 income statement amounted to $2,550,000.What amount of cash collections will Hawthorne will report in the Operating Activities category of its 2017 statement of cash flows assuming that the direct method is used? Show your calculations.

Accepted Answer

The answer of Hawthorne Industries' comparative balance sheets included accounts...

Question 7

Rural Ridge Company reported the following on its balance sheet at December 31,2017:
?
 $$\text { Accounts receivable, less allowance of } \$ 12,400 \quad \$ 500,000$$ A) How much is the net realizable value of Rural Ridge's receivables?

B) What is the balance of the Accounts Receivable account?

C) Are you able to determine whether Rural Ridge uses the allowance method or the direct write off method for uncollectibles? Why or why not?

Accepted Answer

The answer of Rural Ridge Company reported the following on...

Question 8

Sliders Company
Sliders Company sells its merchandise only on credit.The following data are available at December 31,2017:
 $$\begin{array} { l r } 
\text { Sales } & \$ 375,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Accounts receivable-January 1, 2017 } & 60,600 \
\text { Allowance for doubtful accounts-January 1, 2017 } & 3,200 \
\text { Cash collections during 2017 } & 362,500 \
\text { Accounts written off as uncollectible during 2017 } & 2,400
\end{array}$$  
-Refer to the data for Sliders Company.
Assume the company estimates bad debts using an aging analysis and the aging schedule indicates that $3,600 of the year-end Accounts Receivable will be uncollectible.
 A) What amount will Sliders Company recognize as bad debts expense for the year?

B) If the ending balance of Accounts Receivables is $\$ 38,700$, what is the net realizable value of Accounts Receivable reported on December 31, 2017 ?

Accepted Answer

The answer of Sliders Company
Sliders Company sells its merchandise only...

Question 9

Hemmer Company received a 12%,six-month promissory note with a face amount of $10,000 from Stutfeld Company for the sale of merchandise on December 1,2017.
 A) Which party is the maker?$\underline{\quad\quad}$

B) Which party is the payee?$\underline{\quad\quad}$

C) Determine the maturity value of the note.

Accepted Answer

The answer of Hemmer Company received a 12%,six-month promissory note...

Question 10

Rafter.com received a 10%,90-day promissory note with a face amount of $12,000 from Joyce Company,for the sale of merchandise on November 1,2017.
 A) Identify the maturity date of the note.$\underline{\quad\quad}$

B) How much interest income (to the nearest whole month) will Rafter.com earn over the term of the note?

C) How much interest income will Rafter com recognize during 2017 ?

Accepted Answer

The answer of Rafter.com received a 10%,90-day promissory note with...

Question 11

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain.

Accepted Answer

The answer of Can a company use the direct write-off...

Question 12

On August 16,2017,Blenim Corp.purchases 6,000 shares of common stock in Mountain Inc.at a market price of $17 per share.In addition,Blenim pays brokerage fees of $2,000.On October 21,2017,Blenim sells the Mountain stock for $12 per share.
?
Required
Analyze the adjustments needed on Blenim's books in connection with the investment beginning with the purchase of the common stock on August 16,2017,and the sale on October 21,2017.

Accepted Answer

The answer of On August 16,2017,Blenim Corp.purchases 6,000 shares of...

Question 13

Cheswick Corp.
The following information is for Cheswick Corp. at the end of 2017:
$\begin{array} { l r } 
\text { Sales } & \$ 800,000 \
\text { Sales returns and allowances } & 8,000 \
\text { Accounts receivable-December 31, 2017 } & 175,000 \
\text { Allowance for doubtful accounts-December 31, 2017 } & \
\quad \text { (Credit balance) (before adjustment for bad debts) } & 1,000 \
\text { Estimated uncollectible accounts } & \
\quad \text { (Per aging schedule at December 31, 2017) } & 7,500
\end{array}$
-Refer to the data for Cheswick Corp..
Determine the effect on Cheswick Corp.' accounting equation of the year-end adjustment of bad debts using the aging approach.

Accepted Answer

The answer of Cheswick Corp.
The following information is for Cheswick...

Question 14

Sliders Company
Sliders Company sells its merchandise only on credit.The following data are available at December 31,2017:
? $$\begin{array} { l r } 
\text { Sales } & \$ 375,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Accounts receivable-January 1, 2017 } & 60,600 \
\text { Allowance for doubtful accounts-January 1, 2017 } & 3,200 \
\text { Cash collections during 2017 } & 362,500 \
\text { Accounts written off as uncollectible during 2017 } & 2,400
\end{array}$$ ?
-Refer to the data for Sliders Company.
?
Determine the balance of Accounts Receivable at December 31,2017.

Accepted Answer

The answer of Sliders Company
Sliders Company sells its merchandise only...

Question 15

If a company has a choice of acceptable methods to estimate bad debts,what factors should be considered in the selection?

Accepted Answer

The answer of If a company has a choice of...

Question 16

Sliders Company
Sliders Company sells its merchandise only on credit.The following data are available at December 31,2017:
 $$\begin{array} { l r } 
\text { Sales } & \$ 375,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Accounts receivable-January 1, 2017 } & 60,600 \
\text { Allowance for doubtful accounts-January 1, 2017 } & 3,200 \
\text { Cash collections during 2017 } & 362,500 \
\text { Accounts written off as uncollectible during 2017 } & 2,400
\end{array}$$  
-Refer to the data for Sliders Company.
The firm estimates that bad debts could be 1% of its net sales.
 A) What amount will Sliders Company recognize as bad debts expense for the year?

B) Once this calculation is recorded, assume that the company has Accounts Receivable of $\$ 58,700$ and Allowance for Doubtful Accounts of $\$ 800$. What will be the net realizable value once the adjustment from (A) is made?

Accepted Answer

The answer of Sliders Company
Sliders Company sells its merchandise only...

Question 17

On September 20,Mendes Inc.presents credit card drafts to its bank in the amount of $10,000;the collection charge is 4%.
?
Required
Analyze the adjustments needed on Mendes' books on September 20,the date of deposit.

Accepted Answer

The answer of On September 20,Mendes Inc.presents credit card drafts...

Question 18

Speed Wear Bicycle Gear accepts VISA credit cards from its customers.Speed Wear is closed on Sundays and on that day records the weekly sales and remits the credit card drafts to VISA.For the week ending on Sunday,April 12,cash sales totaled $3,650,and credit card sales amounted to $3,900.On April 15,Speed Wear received $3,794.70 from VISA as payment for the credit card drafts.Analyze the necessary adjustments on April 12 and 15.As a percentage,what collection fee is VISA charging Speed Wear?

Accepted Answer

The answer of Speed Wear Bicycle Gear accepts VISA credit...

Question 19

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31.
​
Required
How much interest income will Cyprus Corp.recognize over the term of the note?

Accepted Answer

The answer of Cyprus Corp.received a 7%,six-month promissory note with...

Question 20

The 2017 annual report of Ski Products,Inc.reported the following amounts (in millions of dollars):
Required
1.Compute Ski's accounts receivable turnover ratio for the year ended May 31,2017.(Assume that all sales are on credit. )
2.What is the average collection period in days for an account receivable? Explain your answer.
3.Ski's main products are medium to high-end skis and snow boards.Give some examples of the types of customers you would expect Ski to have.Do you think the average collection period for sales to these customers is reasonable? What other information do you need to fully answer that question?
 $\begin{array}{llr}
  \text { Net sales, for the year ended May 31,2017 } &\$15,111.2\
 \text { Receivables, May 31, 2017 } &989.4\
 \text {Receivables, May 31, 2016  } &1,011.6
\end{array}$

Accepted Answer

The answer of The 2017 annual report of Ski Products,Inc.reported...

Quiz 7: Receivables and Investments

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. Required Identify the maturity date of the note.

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain.

If a company has a choice of acceptable methods to estimate bad debts,what factors should be considered in the selection?

On September 20,Mendes Inc.presents credit card drafts to its bank in the amount of $10,000;the collection charge is 4%. ? Required Analyze the adjustments needed on Mendes' books on September 20,the date of deposit.

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. Required How much interest income will Cyprus Corp.recognize over the term of the note?

Quiz 7: Receivables and Investments

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. Required Identify the maturity date of the note.

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain.

If a company has a choice of acceptable methods to estimate bad debts,what factors should be considered in the selection?

On September 20,Mendes Inc.presents credit card drafts to its bank in the amount of $10,000;the collection charge is 4%. ? Required Analyze the adjustments needed on Mendes' books on September 20,the date of deposit.

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. ​ Required How much interest income will Cyprus Corp.recognize over the term of the note?

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. Required How much interest income will Cyprus Corp.recognize over the term of the note?