Exam 7: Cash and Receivables

During the year, Jantz Company made an entry to write off a $4,000 uncollectible account.Before this entry was made, the balance in accounts receivable was $50,000 and the balance in the allowance account was $4,500.The net realizable value of accounts receivable after the write-off entry was

Use the following information for questions Henry Co.assigned $400,000 of accounts receivable to Easy Finance Co.as security for a loan of $335,000.Easy charged a 2% commission on the amount of the loan; the interest rate on the note was 10%.During the first month, Henry collected $110,000 on assigned accounts after deducting $380 of discounts.Henry accepted returns worth $1,350 and wrote off assigned accounts totaling $2,980. -The amount of cash Henry received from Easy at the time of the transfer was

At the beginning of 2006, Finney Company received a three-year zero-interest-bearing $1,000 trade note.The market rate for equivalent notes was 8% at that time.Finney reported this note as a $1,000 trade note receivable on its 2006 year-end statement of financial position and $1,000 as sales revenue for 2006.What effect did this accounting for the note have on Finney's net earnings for 2006, 2007, 2008, and its retained earnings at the end of 2008, respectively?

Simpson Company has the following account balances at year-end: Accounts receivable \ 60,000 Allowance for doubtful accounts 3,600 Sales discounts 2,400 Simpson should report accounts receivable at a net amount of

Which of the following should be recorded in Accounts Receivable?

The accounts receivable turnover ratio is computed by dividing

Bank overdrafts, if material, should be

At the close of its first year of operations, December 31, 2007, Linn Company had accounts receivable of $540,000, after deducting the related allowance for doubtful accounts.During 2007, the company had charges to bad debt expense of $90,000 and wrote off, as uncollectible, accounts receivable of $40,000.What should the company report on its balance sheet at December 31, 2007, as accounts receivable before the allowance for doubtful accounts?

In the gross method, sales discounts are reported as a deduction from sales.

Cash equivalents are investments with original maturities of six months or less.

The category "trade receivables" includes

The receivables turnover ratio is computed by dividing net sales by the ending net receivables.

The following information is available for Reagan Company: Allowance for doubtful accounts at December 31, 2006 \8 ,00 Credit sales during 2007 400,000 Accounts receivable deemed worthless and written off during 2007 9,000 As a result of a review and aging of accounts receivable in early January 2008, however, it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2007.What amount should Reagan record as "bad debt expense" for the year ended December 31, 2007?

Which of the following statements is incorrect regarding the classification of accounts and notes receivable?

Trade discounts are

If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as

For receivables sold with recourse, the seller guarantees payment to the purchaser if the debtor fails to pay.

On the December 31, 2007 balance sheet of Yount Co., the current receivables consisted of the following: Trade accounts receivable 75,000 Allowance for uncollectible accounts (2,000) Claim against shipper for goods lost in transit (November 2007) 3,000 Selling price of unsold goods sent by Yount on consignment at 130 \% of cost (not included in Yount 's ending inventory) 26,000 Security deposit on lease of warehouse used for storing some inventories 30,000 Total \1 32,000 At December 31, 2007, the correct total of Yount 's current net receivables was

Horvath Company has the following items at year-end: Cash in bank \ 20,000 Petty cash 300 Short-term paper with maturity of 2 months 5,500 Postdated checks 1,400 Horvath should report cash and cash equivalents of

Holtzman Corporation had a 1/1/07 balance in the Allowance for Doubtful Accounts of $10,000.During 2007, it wrote off $7,200 of accounts and collected $2,100 on accounts previously written off.The balance in Accounts Receivable was $200,000 at 1/1 and $240,000 at 12/31.At 12/31/07, Holtzman estimates that 5% of accounts receivable will prove to be uncollectible.What is Bad Debt Expense for 2007?