Exam 7: Receivables and Investments

Espat Corp.reported net sales all on credit) of $1,600,000 and cost of goods sold of $1,100,000 for 2015.Its beginning balance of Accounts Receivable was $150,000.The accounts receivable balance decreased by $10,000 during 2015.Rounded to two decimal places, what is Espat's accounts receivable turnover rate for 2015?

Pharma Corp. The data presented below for Pharma Corp.is for the year ended December 31, 2015: -See the data for Pharma Corp. If Pharma Corp.estimates its bad debts at 1% of net credit sales, what amount will be reported as bad debt expense for 2015?

Mellon Corporation The data presented below is for Mellon Corporation for the year ended December 31, 2015: -Refer to the information for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?

On January 1, 2014, the Accounts Receivable and the Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000 and $550 respectively.During the year, the company reported $70,000 of credit sales.There were $400 of receivables written off as uncollectible in 2014.Cash collections of receivables amounted to $74,700.The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance. The net realizable value of receivables appearing on the 2014 balance sheet will amount to:

The comparative balance sheets for Flagler Co.for 2015 and 2014 indicate that accounts receivable decreased during 2015.Flagler uses the indirect method of preparing the operating activities section of its statement of cash flows.How will the decrease in accounts receivable be reported on the statement of cash flows?

Cash flows from purchases, sales, and maturities of investments are usually classified as activities.

Verilux Company sold merchandise to Flight Corp.on November 1, 2014, for $10,000.Verilux accepted a promissory note from Flight Corp.for $10,000.The note has a term of 5 months and a stated interest rate of 7%.Verilux's accounting period ends on December 31, 2014.What amount should Verilux recognize as interest revenue on December 31, 2014?

Fenchurch Corp.uses the direct write-off method to account for bad debts.What are the effects on the accounting equation of the entry to record the write-off of a customer's account balance?

When a company discounts an interest-bearing note at a bank with recourse:

If Cable Inc.receives $23,825 from credit card collections and has an average rate of 4.7% charged by the credit card company, its credit card sales during the period were:

The accounts receivable turnover ratio is computed by dividing by average accounts receivable.

When Company X buys stock in Company Y, Company X is referred to as the investee.