Exam 9: Accounting for Receivables

A company borrowed $6,000 by signing a 4-month promissory note at 12%. The total interest on the note is $720. $6,000 x 0.12 x 4/12 = $240

The amount due on the maturity date of a $6,000, 60-day 8%, note receivable is:

The account receivable turnover measures:

Calculate the amount of interest that would be owed on a $9,000, 60-day, 9% note receivable at maturity.

On December 31 of the current year, a company's unadjusted trial balance included the following: Accounts Receivable, debit balance of $97,250; Allowance for Doubtful Accounts, credit balance of $951. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year will be uncollectible?

The matching principle prescribes:

A payee of a note usually honors a note and pays it in full.

The percent of accounts receivable method for bad debts estimation uses only income statement account balances to estimate bad debts.

Prepare general journal entries for the following transactions of Viking Company, assuming they use the allowance method to account for uncollectible accounts.

On September 30, Emerson Co. has $540,250 of accounts receivable. Emerson uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $13,750. 1. Prepare journal entries to record the following selected October transactions. The company uses the perpetual inventory system. 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its October 31 balance sheet. a. Sold $325,000 of merchandise (that cost $178,500) to customers on credit. b. Received $425,100 cash in payment of accounts receivable. c. Wrote off $16,700 of uncollectible accounts receivable. d. In adjusting the accounts on October 31, its fiscal year-end, the company estimated that 3.0% of accounts receivable will be uncollectible.

The ____________________ of a note is the day the principle plus interest of a note must be repaid.

_______________ refers to the expected proceeds from converting an asset into cash. ________________________________________

Notes receivable are classified as current liabilities.

Accounts receivable information for specific customers is important because it reveals:

Paoli Pizza bought $5,000 worth of merchandise from TechCom and signed a 90-day, 10% promissory note for the $5,000. TechCom's journal entry to record the sales portion of the transaction is:

The Connecting Company uses the percent of sales method of accounting for uncollectible accounts receivable. During the current year, the following transactions occurred:

Darby uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 4% of accounts receivable, what is the amount of the bad debts expense adjusting entry?

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: All sales are made on credit. Based on past experience, the company estimates 0.6% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used, a company should debit _______________________ and credit accounts receivable.

On December 31, of the current year, a company's unadjusted trial balance revealed the following: Accounts receivable of $185,600; Sales Revenue of $1,280,000; (75% were on credit), and Allowance for Doubtful Accounts of $1,600 (credit balance). Prepare the adjusting journal entry to record the estimate for bad debts assuming: 1. 6.0% of the accounts receivable balance is assumed to be uncollectible. 2. Bad debts expense is estimated to be 1.5% of credit sales. 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet after adjustment. 4. Prepare the entry to write off a $1,500 account receivable on January 1 of the next year. 5. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the balance sheet immediately after writing off the account in part 2.