Exam 8: Receivables

Archer Company has significant amounts of accounts receivable,and experiences uncollectible accounts from time to time.Archer uses the aging method to account for uncollectible accounts.When Archer Company writes off an uncollectible receivable,what is the effect of that single transaction?

At the beginning of 2014,Mark's sales had the following ledger balances: During the year there were $450,000 of credit sales,$460,000 of collections,and $3,700 of write-offs.At the end of the year,Mark's adjusted for uncollectible account expense using the aging method,and calculated an amount of $1,600 as their estimate of uncollectible accounts. -At the end of the year,what was the balance in the Uncollectible account expense?

At the beginning of 2014,Mark's sales had the following ledger balances: During the year there were $450,000 of credit sales,$460,000 of collections,and $3,700 of write-offs.At the end of the year,Mark's adjusted for uncollectible account expense using the percent-of-sales method,and applied a rate,based on past history,of 1.2% -At the end of the year,what was the balance in the Accounts receivable?

On December 1,2014,Parsons Sales sold machinery to a customer for $2,000.The customer could not pay at the time of sale,but agreed to pay 9 months later,and signed a 9-month note at 12% interest.How much interest revenue was earned during the year 2015?

Tarheel Services is holding a note receivable from one of its customers and wishes to collect the cash earlier than the maturity date of the note.The note is for $1,000 and carries a rate of 4%.Tarheel sells the note to a bank for $950.Please provide the journal entry which Tarheel makes to record this transaction.

On October 1,2014,Allen Jewelry Company accepted a 4-month,10% note for $2,400 in settlement of an overdue account receivable.If the company accrues interest at year-end only,how much interest revenue should be accrued on December 31,2014?

On January 1,Wolfie's Supply sold $222 worth of goods to customer Abe Smith on account.For several months Wolfie's tried unsuccessfully to collect from the customer,and finally decided to write off the account.Please record the journal entry for the write-off.(Wolfie's uses the allowance method.)

On September 1,2013,Adirondac Marine Supplies made a loan to one of its customers.The customer signed a 6-month note for $1,500 at 10%.How much interest revenue did Adirondac record in the year 2014?

The following information is from the 2013 records of Armadillo Camera Shop: Accounts receivable, December 31,2013 \ 20,000 (debit) Allowance for uncollectible accounts, December 31,2013 prior to adjustment 600 (debit) Net credit sales for 2013 95,000 Accounts written off as uncollectible during 2013 7,000 Cash sales during 2013 27,000 - Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method.Management estimates that $2,850 of accounts receivable will be uncollectible.Which of the following will be the amount of Uncollectible accounts expense?

Perry Materials Supply uses the aging method to account for uncollectible accounts.At the end of the year,the balance in Accounts receivable was $146,000 and Perry prepared the following aging schedule. Customer 1-30 Days 31-60 Days 61-90 Days Over 90 Days Total Balance Johnson \ 4,600 \ 3,200 \ 7,800 Hot Pots, Inc. \ 800 \ 1,000 1,800 Potter 40,000 550 40,550 Harrison 3,600 900 4,500 Marx 2,000 50 2,050 Younger 65,000 65,000 Merry Maids 5,900 5,900 Acher 12,000 6,400 18,400 Total \ 127,500 \ 13,750 \ 3,700 \ 1,050 \ 146,000 Uncollectible percentage Estimated uncollectible amount Based on past history,Perry uses 2% for current receivables (1-30 days),10% for 31-60 days,20% for 61-90 days,and 40% for over 90 days.Please complete the schedule and calculate the estimated amount of Uncollectible accounts.

On December 1,2014,Parsons Sales sold machinery to a customer for $2,000.The customer could not pay at the time of sale,but agreed to pay 9 months later,and signed a 9-month note at 12% interest.How much interest revenue was earned during the year 2014?

A newly created design business called Smart Art is just finishing up its first year of operations.During the year,there were credit sales of $40,000 and collections of $36,000.One account for $650 was written off.Smart Art uses the percent-of-sales method to account for uncollectible account expense,and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense. -At the end of the year,what is the ending balance in the Allowance for uncollectible accounts?

The acid-test ratio measures:

Which of the following are the two methods of estimating uncollectible receivables?

Which of the following is a benefit of selling on credit?

Accounts receivable amounts are generally shown on the balance sheet net of the allowance.

On October 2,2014,Allen Jewelry Company accepted a 4-month,10% note for $2,400 in settlement of an overdue account receivable.What is the journal entry to record the acceptance of the note?

The aging-of-accounts-receivable method computes uncollectible accounts expense as a percentage of net credit sales.

What is the maturity value of a note?

On October 1,2012,Allen Jewelry Company accepted a 4-month,10% note for $2,400 in settlement of an overdue account receivable.Interest revenue was accrued through December 31,2012.Allen receives the maturity value of the note (the original principal plus all of the interest)on the due date.What journal entry is needed when the funds are collected?