Exam 8: Accounting for Receivables

Wainwright Stores accepts both its own and national credit cards. During the year the following selected summary transactions occurred. Jan. 15 Made Wainwright credit card sales totaling $24,000. (There were no balances prior to January 15.) 20 Made Visa credit card sales (service charge fee 2%) totaling $7,000. Feb. 10 Collected $14,000 on Wainwright credit card sales. 15 Added finance charges of 1% to Wainwright credit card balance. Instructions (a) Journalize the transactions for Wainwright Stores. (b) Indicate the statement presentation of the financing charges and the credit card service charge expense for Wainwright Stores.

The two key parties to a promissory note are the

In reviewing the accounts receivable, the cash realizable value is $16,000 before the write-off of a $1,500 account. What is the cash realizable value after the write-off?

Bad Debt Expense is reported on the income statement as

If a company uses the allowance method to account for uncollectible accounts, the entry to write off an uncollectible account only involves balance sheet accounts.

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

The following data exists for Carley Company. Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2018.

The interest on a $9,000, 6%, 90-day note receivable is

Receivables might be sold to

Other receivables include nontrade receivables such as loans to company officers.

Listed below are two independent situations involving the disposition of receivables. 1. Morales Company sells $320,000 of its receivables to Instant Factors, Inc. Instant Factors assesses a finance charge of 3% of the amount of receivables sold. Instructions Prepare the journal entry to record the sale of the receivables on Morales Company's books. 2. A restaurant is the site for a large company party. The bill totals $3,400 and is charged by the patron on a Visa credit card. Instructions Assume a 3% service fee is charged by Visa. Record the entry for the transaction on the restaurant's books.

Compute the maturity value for each of the following notes receivable. 1. A $5,000, 6%, 3-month note dated July 20. Maturity value $____________. 2. A $12,000, 9%, 150-day note dated August 5. Maturity value $____________.

A 60-day note receivable dated July 13 has a maturity date of

Trade accounts receivable are valued and reported on the balance sheet

Which of the following are also called trade receivables?

When credit sales are made, _________________ Expense is considered a normal and necessary risk of doing business on a credit basis.

Which of the following statements concerning receivables is incorrect?

Which of the following would require a compound journal entry?

On December 31, 2018, the balance in Megan's Products Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2018. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible. Instructions Prepare the adjusting entries to record estimated bad debt expense using the percentage-of-receivables basis under each of the following independent assumptions: (a) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment. (b) Allowance for Doubtful Accounts has a debit balance of $730 before adjustment.

A 75-day note receivable dated June 10 would mature on ______________.