Exam 8: Receivables

When a business is holding a note receivable and wishes to collect cash prior to the maturity date of the note,the business may sell the note to a bank or a financial broker.This process is called discounting a note.

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 Accounts receivable?

Which of the following is the party borrowing funds on a note?

On December 1,2013,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.Please provide the journal entry to record the revenue at the time of sale.(You may disregard the entry for cost of goods sold.)

A company has the following account balances.What is the acid-test ratio? (Please round to two decimal places.) Cash \ 60,000 Short-terminvestments 75,000 Net current receivables 140,000 Inventory 145,000 Total current liabilities 395,000

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 $1,080.Please provide the journal entry with Tarheel makes to record this transaction.

The Allowance for uncollectible accounts currently has a debit balance of $750.After analyzing the accounts in the accounts receivable subsidiary ledger,the company's management estimates that uncollectible accounts will be $16,000.What will be the balance of the Allowance for uncollectible accounts reported on the balance sheet?

A company reports Net accounts receivable of $107,460 on its December 31,2013 balance sheet.The Allowance for uncollectible accounts has a credit balance of $3,200.What is the balance in Accounts receivable?

Anchor Sales accepts credit cards from its customers.Assume Anchor makes a sale of $100 and the processor charges a 3% fee.Assume that the credit card processing company uses the net method of depositing funds.Provide the journal entry made by Anchor to record the sales revenue.

Total interest accrued on a $7,500,5%,3-month note is:

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 for the entire term of the note?

On which of the following dates does a three-month note dated November 12 mature?

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 percent-of-sales method.Management estimates that 3% of net credit sales will be uncollectible.Which of the following will be the balance of the Allowance for uncollectible accounts after adjustment?

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 balance in Uncollectible account expense?

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%.When the note matured on March 1,2014,the customer settled with the company in full.How much cash did Adirondac collect from the customer?

Anchor Sales accepts credit cards from its customers.Assume Anchor makes a sale of $100 and the processor charges a 3% fee.Assume that the credit card processing company uses the gross method of depositing funds.This method employs a sequence of two separate journal entries to record the revenue transaction and settlement with the processor.Please provide the second journal entry made by Anchor to record the completion of the settlement with the processor.

The days' sales in receivables measures:

Which of the following is NOT a key issue in controlling and managing receivables?

A business is holding a note receivable and wishes to cash it in before its maturity date by selling it to a bank.If the business receives more than the maturity value of the note,the difference is treated as:

On January 1,Ajax Company accepted a one-year note for $5,000 at 4% from one of its customers.When the note matured on December 31,the customer was unable to pay,and Ajax treated it as a dishonored note.How much interest revenue did Ajax record at December 31?