Exam 9: Receivables

At the beginning of 2017,Brady,Inc.has the following account balances: Accounts Receivable $45,000 (Debit) Allowance for Bad Debts $5,000 (Credit) Bad Debts Expense $0 During the year,credit sales amounted to $810,000.Cash collected on credit sales amounted to $780,000,and $16,000 has been written off.At the end of the year,the company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 3.5%.The amount of bad debts expense for 2017 is ________.

Which of the following is included in the denominator of the acid-test ratio?

The following information is from the records of Armadillo Camera Shop: The company uses the direct write-off method for bad debts.What is the amount of bad debts expense?

GAAP requires companies to use the ________ method to record bad debts expense.

On January 16,2017,Eliot Brothers Oil,Inc.sold $5,000 of merchandise to Bryce,on account.Eliot Brothers could not collect cash from Bryce and wrote off the account on December 31,2017.On November 4,2018,Bryce unexpectedly paid $5,000.Journalize the transactions on December 31,2017 and November 4,2018.(Eliot Brothers uses the allowance method. )

The Allowance for Bad Debts is a contra account to Accounts Receivable.

A business that accepts payments by credit and debit cards ________.

For a promissory note,the entity to whom the promise of future payment is made is the ________.

In order to keep accurate records about the collection of cash for a previously written off account,collection of cash for a previously written off account,a business should re-establish the Accounts Receivable by debiting the receivable account.

Markus Company maintains a separate accounts receivable account for each customer.On June 18,Markus sells $6,200 services on account to customer Anthony and $1,600 services on account to customer Walker.How will these two transactions affect the control and subsidiary accounts?

During July 2017,Bridgeport Enterprises recorded the following: Sales of $86,400 ($64,500 on account,$21,900 for cash) Collections on account,$58,950 Write-offs of uncollectible receivables,$2,560 Recovery of receivable previously written off,$1,000 Journalize Bridgeport's transactions during July,assuming Bridgeport uses the allowance method.

Dean Art is a new business.During its first year of operations,credit sales were $41,000 and collections of credit sales were $34,000.One account,$725,was written off.Management uses the aging-of-receivables method to account for bad debts expense and estimated $500 as uncollectible at year end.The ending balance of the Allowance for Bad Debts is ________.

The following information is from the 2017 records of Albert Book Shop: Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5,100 of accounts receivable will be uncollectible.Calculate the amount of bad debts expense for 2017.

On July 1,2017,Collins Jewelers accepted a 3-month,15% note for $6,000 in settlement of an overdue account receivable.Prepare the journal entry to record the acceptance of the note.

On August 14,Main Street Bank lent $300,000 to City Cafe on a 75 day,5% note.What is the maturity date of the note?

Which of the following is a weak internal control over cash collections from receivables?

A company with significant amounts of accounts receivable experiences uncollectible accounts from time to time.If the company uses the direct write-off method,the effect of writing off an uncollectible receivable will be ________.

Martin Sales provides the following information: Net credit sales: $790,000 Beginning net accounts receivable: $43,000 Ending net accounts receivable: $20,000 Calculate the accounts receivable turnover ratio.(Round your answer to the nearest whole number. )

The interest period extends from the original date of the note to the maturity date.

On April 1,2017,Banne Services received a 9-month note for $13,000 at 11%.Calculate the amount of interest due at maturity.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )