Exam 7: Sales and Receivables

What is the maturity date of a note that is signed on April 15, 2011 at 9% for 216 days?

A company has $295,000 in credit sales. The company uses the allowance method of determining Bad Debts Expense. The Allowance for Doubtful Accounts now has a $250 debit balance. The company uses the allowance method based on an aging of accounts receivable and determines $13,400 as uncollectible. What will be the amount of the Bad Debts Expense and what is the journal entry?

Tildy Corporation reported total sales of $944,000 of which 30% are on credit; beginning net accounts receivable of $69,000; and ending net accounts receivable of $71,000. What is Tammy's accounts receivable turnover? If last year's accounts receivable turnover was 5, is there an improvement or deterioration? Indicate the reason for your answer.

Meranda Corporation reported cash sales of $235,000; net credit sales of $515,000; beginning net accounts receivable of $212,000; and ending net accounts receivable of $224,000. Meranda's accounts receivable turnover is:

Walmart operates on a quick ratio of less than 0.20 because it collects cash:

The amount loaned out by the payee is called the maturity value.

Using a 360-day year, what is the maturity value of a 90-day note for $3,500 at 8% annual interest?

Use the allowance method to account for uncollectible accounts -There are two methods for accounting for uncollectible receivables.

The journal entry to write off a customer's account under the direct write-off method is:

Use the allowance method to account for uncollectible accounts -Bad Debts Expense is debited when writing off customer accounts under the Allowance method.

On March 10, 2012, Allyson Enterprises determined that its customer Betty Chow's account for $780 was considered uncollectible. If Allyson uses the allowance method, what is the journal entry required to write off Betty Chow's account?

Use the allowance method to account for uncollectible accounts -Receivables of a company CANNOT be long-term assets.

A promissory note is a verbal promise to pay a specified amount of money on a particular future date.

Margaret is a customer of Tammy Company. The company wrote off her account of $1,200 on August 15. On October 12, she sent in a payment of $560. What is the journal entry that Tammy Company will record first to reinstate her account?

The business or person that signs the note and promises to pay the required amount is called the payee.

Tammy Corporation reported cash sales of $118,000; net credit sales of $343,000; beginning net accounts receivable of $89,000; and ending net accounts receivable of $111,000. What is Tammy's accounts receivable turnover? If last year's accounts receivable turnover was 3, is there an improvement or deterioration? Indicate the reason for your answer.

Sierra Company has cash of $33,000; net accounts receivable of $41,000; short-term investments of $15,000; and inventory of $25,000. It also has $30,000 in current liabilities and $50,000 in long-term liabilities. The quick ratio for Sierra Company is:

What are the two methods of accounting for uncollectible accounts?

What does the term "maturity date" mean?

Journalize the following transactions for Allan Company using the allowance method: April 21 Sold $560 of merchandise on account to Bill Smith. June 30 Bill Smith filed bankruptcy and his account was written off. August 1 Replaced Joe's $4,500 receivable balance with a 4%- 8month note. Dec 31 Recorded Bad Debts Expense based on 6% of credit sales of $120,000 Dec 31 Recorded interest on the note.