Exam 7: Receivables and Investments

Slammer Sports The following information is for Slammer Sports at the end of 2014: Refer to the data for Slammer Sports. Assume that the net realizable value is $170,000 after the adjustment for bad debts in 2014.How much is the net realizable value of accounts receivable after a customer's account of $2,500 is written off? Explain why.

The following information was presented in the balance sheet of Gloria Company as of December 31,2014: Which one of the following statements is true?

Bonds issued by corporations or governmental bodies as a form of borrowing are called ____________________.

Americana Corporation The data below is for Americana Corporation for 2014. Refer to the data for Americana Corporation If the aging approach is used to estimate bad debts,what is the balance in the Allowance for Doubtful Accounts after the bad debt expense adjustment.

On January 1,2014,the Accounts Receivable and the Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000 and $550 respectively.During the year,the company reported $70,000 of credit sales.There were $400 of receivables written off as uncollectible in 2014.Cash collections of receivables amounted to $74,700.The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance. The net realizable value of receivables appearing on the 2014 balance sheet will amount to:

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

Typically,the lower the accounts receivable turnover ratio,the better.

The data presented below is for Tallon,Inc.for 2014. What amount will Tallon show on its year-end balance sheet for the net realizable value of its accounts receivable?

Hui Corporation The data below is for Hui Corporation for 2014. Refer to the data for Hui Corporation. If the aging approach is used to estimate bad debts,what should the balance in the Allowance for Doubtful Accounts be after the bad debts adjustment?

Baggs buys $100,000 of Vista Company bonds on January 1,2014 at face value.The bonds pay 10% interest semiannually on June 30 and December 31.If Baggs sells the bonds at 99 on July 1,2014,there will be a loss reported on the income statement.

What should a company do to improve its accounts receivable turnover rate?

The amount of cash the maker is to pay the payee on the maturity date of the note is called the ____________________.

Because the allowance method results in better matching,accounting standards require its use rather than the direct write-off method,unless bad debts are immaterial.

The data presented below is for Tallon,Inc.for 2014. What is the effect on liquidity when Tallon records its estimate for bad debt expense using the allowance method?

Accounts receivable are shown on the balance sheet at their net realizable amount.

If accounts receivable turnover is faster,this means that fewer days are required to collect receivables.

A high accounts receivable turnover ratio could mean that the company's credit policies may be too stringent.

Bagel Inc.reported net income of $105,000 for the year ended December 31,2014.The following items were included on Bagel's balance sheets at December 31,2014 and 2013:

When a note receivable has been discounted by a company

If a company uses the direct write-off method of accounting for bad debts,