____ 16. A 180-day, 12 percent interest-bearing note receivable is sold to a bank after being held for 45 days. The proceeds are calculated using a 15 percent interest rate. The note receivable has been
Discounted
Pledged
a.
Yes Yes
b.
Yes No
c.
No Yes
d.
No No
____ 17. Based on its past collection experience, Ace Company provides for bad debts at the rate of 2 percent of net credit sales. On January 1, 2016, the allowance for doubtful accounts credit balance was $10,000. During 2016, Ace wrote off $8,000 of uncollectible receivables and recovered $5,000 on accounts written off in prior years. If net credit sales for 2016 are $1,000,000, the doubtful accounts expense for 2015 should be
a.
$7,000.
b.
$20,000.
c.
$23,000.
d.
$35,000.
____ 18. Millward Corporation's books disclosed the following information for the year ended December 31, 2015:
Net credit sales .....................................
$1,500,000
Net cash sales .......................................
240,000
Accounts Receivable at beginning of year .............
200,000
Accounts Receivable at end of year ...................
400,000
Millward's accounts receivable turnover is
a.
3.75 times.
b.
4.35 times.
c.
5.00 times.
d.
5.80 times.
____ 19. Assume the following facts for Kurt Company: The month-end bank statement shows a balance of $40,000; outstanding checks total $2,000; a deposit of $8,000 is in transit at month-end; and a check for $400 was erroneously charged against the account by the bank. What is the correct cash balance at the end of the month?
a.
$33,600
b.
$34,400
c.
$45,600
d.
$46,400
____ 20. On June 1, Clinton Corporation accepted a customer's $10,000, 9 percent, 3 month note. On July 1, the note was discounted at a bank at a rate of 12 percent.
a. What is the maturity value of the note (10,000*.09*3/12)? _______
b. How much cash did Clinton receive from the bank on the discounted note (MV * .12*2/12)? $10,225- ?
a.
$9,800.00
b.
$9,942.50
c.
$10,020.50
d.
$10,250.00
____ 16. A 180-day, 12 percent interest-bearing note receivable is sold to a bank after being held for 45 days. The proceeds are calculated using a 15 percent interest rate. The note receivable has been
| Discounted | Pledged |
| a. | Yes Yes |
| b. | Yes No |
| c. | No Yes |
| d. | No No |
____ 17. Based on its past collection experience, Ace Company provides for bad debts at the rate of 2 percent of net credit sales. On January 1, 2016, the allowance for doubtful accounts credit balance was $10,000. During 2016, Ace wrote off $8,000 of uncollectible receivables and recovered $5,000 on accounts written off in prior years. If net credit sales for 2016 are $1,000,000, the doubtful accounts expense for 2015 should be
| a. | $7,000. |
| b. | $20,000. |
| c. | $23,000. |
| d. | $35,000. |
____ 18. Millward Corporation's books disclosed the following information for the year ended December 31, 2015:
| Net credit sales ..................................... | $1,500,000 |
| Net cash sales ....................................... | 240,000 |
| Accounts Receivable at beginning of year ............. | 200,000 |
| Accounts Receivable at end of year ................... | 400,000 |
Millward's accounts receivable turnover is
| a. | 3.75 times. |
| b. | 4.35 times. |
| c. | 5.00 times. |
| d. | 5.80 times. |
____ 19. Assume the following facts for Kurt Company: The month-end bank statement shows a balance of $40,000; outstanding checks total $2,000; a deposit of $8,000 is in transit at month-end; and a check for $400 was erroneously charged against the account by the bank. What is the correct cash balance at the end of the month?
| a. | $33,600 |
| b. | $34,400 |
| c. | $45,600 |
| d. | $46,400 |
____ 20. On June 1, Clinton Corporation accepted a customer's $10,000, 9 percent, 3 month note. On July 1, the note was discounted at a bank at a rate of 12 percent.
a. What is the maturity value of the note (10,000*.09*3/12)? _______
b. How much cash did Clinton receive from the bank on the discounted note (MV * .12*2/12)? $10,225- ?
| a. | $9,800.00 |
| b. | $9,942.50 |
| c. | $10,020.50 |
| d. | $10,250.00 |
Related questions
| On January 1, 2016, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $65,400 and $1,700, respectively. During the year Kincaid reported $162,000 of credit sales. Kincaid wrote off $1,350 of receivables as uncollectible in 2016. Cash collections of receivables amounted to $178,900. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. |
The amount of uncollectible accounts expense recognized in the 2016 income statement will be:
|
12. Raintree Cosmetic Company sells its products to customers ona credit basis. An adjusting entry for bad debt expense is recordedonly at December 31, the companyâs fiscal year-end. The 2015balance sheet disclosed the following: |
| Current assets: | |||||
| Receivables, net of allowance for uncollectibleaccounts of $39,000 $477,000 | |||||
During 2016, credit sales were $1,795,000,cash collections from customers $1,875,000, and $44,000 in accountsreceivable were written off. In addition, $3,900 was collected froma customer whose account was written off in 2015. An aging ofaccounts receivable at December 31, 2016, reveals thefollowing: |
| Percentage of Year-End | Percent | ||||
| Age Group | Receivables in Group | Uncollectible | |||
| 0â60 days | 70 | % | 5% | ||
| 61â90 days | 20 | 15 | |||
| 91â120 days | 5 | 20 | |||
| Over 120 days | 5 | 40 | |||
| Required: |
| 2. | Prepare the year-endadjusting entry for bad debts according to each of the followingsituations: |
| a. | Bad debt expense isestimated to be 4% of credit sales for the year. |
| b. | Bad debt expense is estimated by computing net realizable valueof the receivables. The allowance for uncollectible accounts isestimated to be 10% of the year-end balance in accountsreceivable. |
| c. | Bad debt expense is estimated by computing net realizable valueof the receivables. The allowance for uncollectible accounts isdetermined by an aging of accounts receivable. |
(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.) | |
| 3. | For situations (a)â(c) in requirement 2 above, what would be thenet amount of accounts receivable reported in the 2016 balancesheet? |
The Septemberâ30,2017â,records of Perfecto Communications include theseâ accounts:
| Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . | $250,000 |
| Allowance for Doubtful Accounts . . . . . . . . . . . . . . . . . . . | (8,300) |
During theâ year,
Perfecto Communications estimatesâ doubtful-account expense atâ 1% of credit sales. Atâ year-end (Decemberâ 31), the company ages its receivables and adjusts the balance in the Allowance for Doubtful Accounts to correspond to the aging schedule. During the last quarter of 2017â, the company completed the following selectedâ transactions:
| Nov 30 | Wrote off as uncollectible the $1,300 account receivable from Brown Carpets and the $400 account | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| receivable from Priceless Antiques. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dec 31 | Adjusted the Allowance for Doubtful Accounts and recorded doubtful-account expense at year-end, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| based on the aging of receivables.
Requirement 1. Record the transactions for the last quarter of 2017 in the journal. Explanations are not required. â(Record debitsâ first, then credits. Exclude explanations from any journalâ entries.) Wrote off as uncollectible the $1,300 account receivable from Brown Carpets and the $400 account receivable from Priceless Antiques .
Adjusted the Allowance for Doubtful Accounts and recordedâ doubtful-account expense atâ year-end, based on the aging of receivables.
Requirement 2. Prepare aâ T-account for Allowance for Doubtful Accounts with the appropriate beginning balances. Post the entries from Requirement 1 to that account. Open theâ T-account by posting the beginning balance. Then post the entries to the Allowance for Doubtful Accountsâ T-account and calculate the ending balance.
2016 and2017 . Use theâ three-line reporting format. AtDecember â31,2016 â, theâ company's Accounts Receivable balance was$ 213 comma 000 â, and the Allowance for Doubtful Accounts stood at$ 4 comma 700 .
Choose from any list or enter any number in the input fields and then continue to the next question. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
