Exam 7: Financial Assets

Red Pine, Inc. established a $400 petty cash fund several months ago and replenishes it at the end of each month. During the first two weeks of March, $185 was disbursed from the petty cash box for miscellaneous items. If a surprise count of the fund is made on March 15, the petty cash box should contain:

At year-end, Atkins Company applies the income statement approach in estimating uncollectible accounts expense and determines such expense to be 2% of net sales. At December 31 of the current year, accounts receivable total $600,000, and Allowance for Doubtful Accounts has a credit balance of $4,200 prior to adjustment. Net sales for the current year were $2,300,000. Compute the net realizable value of accounts receivable to be reported in Dewey's December 31 balance sheet.

Assuming Neptune does not sell this investment, the mark-to-market adjustment necessary at December 31, 2011, includes:

Prepare the journal entry to correct Huang's records as of June 30. (Explanations may be omitted; one compound journal entry is acceptable.) 2009 General Journal Debit Credit June 30

Stanley, Inc.'s 2009 income statement reported net sales of $6,000,000, uncollectible accounts expense of $160,000, and net income of $700,000. Stanley's average accounts receivable during 2009 amounted to $1,200,000. Using 360 days to a year, Stanley's

The valuation principle of "mark-to-market" applied to investments classified as available for sale securities:

Taylor, Inc. had accounts receivable of $310,000 and an allowance for doubtful accounts of $19,500 just before writing off as worthless an account receivable from Burton Company of $1,300. The net realizable value of the accounts receivable before and after the write-off were:

While preparing a bank reconciliation, an accountant discovered that a $426 check returned with the bank statement had been recorded erroneously in the depositor's accounting records as $462. In preparing the bank reconciliation the appropriate action to correct this error would be to:

When an Allowance for Doubtful Accounts is used, accounts receivable are valued in the balance sheet at their estimated net realizable value.

Financial assets describe not just cash, but all assets that are easily and directly convertible into known amounts of cash, except marketable securities.

An unrealized loss on available-for-sale securities will reduce net income.

Assuming a 365 day year, Bush Industries calculated an average of 47 days to collect its accounts receivable in 2012. During 2012, Bush's accounts receivable turnover rate:

In preparing a bank reconciliation, a service charge shown on the bank statement should be:

Silver Company received a 60-day, 6% note for $16,000 on August 5. Which of the following statements is true?

An Unrealized Holding Gain (or Loss) on Investments classified as "available-for-sale" securities:

An unrealized gain on available-for-sale securities will increase shareholders' equity.

Tutor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400. The net realizable value of Tutor's accounts receivable in the March 31 balance sheet is:

Windsor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400. What is the amount of uncollectible accounts expense recognized in Windsor's income statement for January?

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

You are to complete the June 30 bank reconciliation for Huang, Inc. using the following information: