Exam 7: Sales and Receivables

Victor Company has cash of $23,000; net accounts receivable of $49,000; long-term investments of $25,000; and supplies of $13,000. It also has accounts payable of $20,000; other current liabilities of $15,000; and $70,000 in long-term liabilities. What is the quick ratio for Victor Company? Is the current year's quick ratio good?

On March 1, 2012, Kelly Company lent $3,500 to Tim on a 1-year 6% promissory note. The amount of interest to be accrued on December 31 will be:

A customer's written promise to pay an amount of money to a business with interest is a(n) ________ of the business.

Assume a retailer has a credit card sale of $1,400, with cost of the product being $1,050. The business pays $8 of processing fees, which are deducted from the proceeds. The journal entry to record these sales would be __________.

MasterCard and Visa sales are treated like cash sales.

The formula for the quick ratio is quick assets divided by non-current assets.

Rory Company exchanged an accounts receivable of $5,300 for an 8-month, 6% note on November 1, 2012. Record the journal entries on December 31 to record accrued interest and on July 1 to record paying off of the note with interest.

A company has a quick ratio of 1.23. What does this mean?

When a customer fails to pay on their account, it creates a(n):

Assume that at December 31, 2013, Sophie Corporation has an Accounts Receivable balance of $325,000 and its Allowance for Doubtful Accounts balance is $17,979. How is the Accounts Receivable presented on the balance sheet?

Rick Company has cash of $143,000; net accounts receivable of $89,000; short-term investments of $35,000; and prepaid expenses of $40,000. It also has $50,000 in current liabilities and $80,000 in long-term liabilities. What is the quick ratio for Rick Company?

On April 23, Lauren paid $4,750 to Ryan Company to fulfill her promissory note agreement. Of the $4,750, $750 is interest. The journal entry Ryan Company will record is __________.

Under the percentage of sales method, how is Bad Debts Expense calculated?

Use the allowance method to account for uncollectible accounts -The aging method of calculating uncollectible accounts considers the existing balance in the Allowance for Doubtful Accounts.

A company has $235,000 in credit sales. The company uses the allowance method of determining Bad Debts Expense. The Allowance for Doubtful Accounts now has a $7,250 credit balance. If the company uses the allowance method based on 7% of credit sales, what will be the amount of the journal entry credited to Allowance for Doubtful Accounts?

Accounts receivable are reported at "current market value" in the current assets section of the balance sheet.

How is the "net realizable value" of accounts receivable computed ?

A retailer has 2% credit/debit card service fees deducted from the proceeds from each sale. The retailer has $4,800 in sales for the day. The journal entry to record these sales would be __________.

Use the allowance method to account for uncollectible accounts -The percentage-of-sales method is called the balance sheet method.

Toy Company has 4% credit/debit card service fees deducted monthly by the bank from Toy Company's bank account. Toy Company has $75,000 in sales for the month. At what amount will Toy Company record this month's sales?