Exam 7: Receivables and Investments

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

Satin Corporation The data presented below is for Satin Corporation for the year ended December 31,2014. Refer to the information for Satin Corporation. If Satin uses the aging of accounts receivable approach to estimate its bad debts,what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?

On July 1,2014,Tipper Corp.purchased $100,000 of 8% bonds at face value.Interest is paid annually on June 30.If the accounting year for Tipper ends at December 31,2014,what will be reported with respect to the bonds on that date?

The comparative financial statements for the years ended December 31,2014 and 2013 for Sophia Company reported the following information. Answer these questions concerning Sophia Company's receivables:

What is the impact on the cash flow statement from an increase in notes receivable,assuming the indirect method is used?

The difference between the principal amount of a note and its maturity value is called ____________________.

Megan Farms received a promissory note from a customer on March 1,2014.The face amount of the note is $8,000;the terms are 90 days and 9% interest.At the maturity date,the customer pays the amount due for the note and interest. What entry is required on the books of Megan Farms on the maturity date assuming none of the interest had already been recognized?

An aging schedule typically categorizes the various accounts by the length of time each invoice is outstanding.

Sliders Company Sliders Company sells its merchandise only on credit.The following data is available at December 31,2014: Refer to data for Sliders Company. Determine the balance of Accounts Receivable at December 31,2014.

Identify two methods of accelerating cash from sales.

Verilux Company sold merchandise to Flight Corp.on November 1,2014,for $10,000.Verilux accepted a promissory note from Flight Corp.for $10,000.The note has a term of 5 months and a stated interest rate of 7%.Verilux's accounting period ends on December 31,2014. What amount should Verilux recognize as interest revenue on the maturity date of the note?

On July 1,2014,Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2015. If Falcon's fiscal year ends September 30,2014,an adjusting entry is needed to:

How will the payee of the promissory note record the note on its books?

Purchases and sales of cash equivalents are reported as investing activities on a statement of cash flows.

For what reason would a company buy 10% of the common stock of a second company?

Over the life of a note,the maker of a note recognizes ____________ on the balance sheet and _____________ on the income statement.

Which one of the approaches for the allowance method of accounting for bad debts emphasizes matching bad debts expense with revenue on the income statement?

Why does the discounting of a note receivable with recourse result in a contingent liability? Should the liability be reported on the balance sheet? Explain.

Tippi Corp.invested cash in a 9-month certificate of deposit (CD)on October 1,2014.If Tippi has an accounting period which ends on December 31,2014,when would it most likely recognize interest revenue from the CD?

The entry required to recognize the bad debts expense for 2014 will act to: