Exam 5: Sales and Receivables

On January 2, Alfredo Corporation sold merchandise with a gross price of $100,000 to a customer with terms of 2/10, n/30. How much Sales Discounts would be recorded if payment was received from the customer on January 8? Assume the company uses the Gross Method of recording receivables.

Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively, at the beginning of 2014. During 2013, a customer defaults on a $12,000 balance related to goods purchased during 2011. By the end of the year, the company had made credit sales of $2,400,000 and collected $2,200,000 on account. It now estimates that 1 percent of its credit sales will default.

The ____________________ order is necessary for the buyer to be obligated to accept and pay for the ordered goods.

You Decide Essay You are interning at a financial services firm and have been asked to evaluate the performance of two major department stores. The following information (in millions)is available for Wal-Mart and Nordstrom for the most recent fiscal periods available: Wal-Mart Nordstrom Compute the (1)gross profit margin, (2)operating margin, (3)net profit margin, and (4)accounts receivable turnover for the two companies and indicate which company's performed better.

If a company uses the allowance method to account for doubtful accounts, when will the company's Stockholders' equity decrease?

According to the ____________________ principle, bad debt expense must be recorded in the period in which the sale was made.

Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long?

The following data are from the company's records for 2013: -Refer to the Ace Computing Company. The net realizable value of receivables appearing on the 2013 balance sheet will amount to

On June 3, 2013, Alpine Corporation sold merchandise with a gross price of $45,000 with terms of 2/10, n/30. Prepare the journal entries to:

A(n)____________________ categorizes the various accounts receivable amounts by the length of time outstanding.

A company 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?

A company's accounts receivable balance after posting net collections from customers for 2013 is $150,000. Management feels that uncollected accounts should be based on the following aging of accounts receivable and uncollected percentages. There are $100,000 that are 1-30 past due at 2% and $50,000 that are 31 to 60 days past due at 10%. The net realizable value of the accounts receivable is

Select the term that matches each of the following descriptions. a.Sales Discount b.Trade Discount c.Sales Allowance d.Sales Returns -Reduction of price granted by the seller for a particular class of customers

Internal control for sales involve which of the following documentation?

The following data are from the company's records for 2013: -Refer to A&B Foods. If the company uses 4% of net credit sales to estimate its bad debts, what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?

All of the following are true for a company that uses the allowance method of accounting for bad debts, EXCEPT:

All American Storage Corporation sold merchandise with credit terms of 2/10, n/30, for $100,000 to a customer on January 01, 2013. Nine months later, on October 1, 2013 the company accepted a 12%, 6-month note receivable in settlement of the account. The customer paid the maturity value of the note on the due date.Prepare the following journal entries:

Accutemp Heating & Air On May 1, 2013, the company sold merchandise to a customer and received a 8%, 6-month note with a principal amount of $100,000. The company's year end is December 31. -Refer to Accutemp Heating & Air. How much total interest revenue will the company recognize over the term of the note?

-Refer to Aardvark Resale. Determine the balance of Accounts Receivable at December 31, 2013.

The following information was taken from the company's records at the end of 2013. -Refer to Atlantis Tropicals. Assume that the net realizable value is $210,000 after the adjustment for bad debts in 2013. How much is the net realizable value of accounts receivable after a customer's account of $15,000 is written off? Explain why.