Chapter 07 -Cash and Receivables

62.

What accounts receivable balance would Dinty report in its first year-end balance sheet?

63.

In Dinty's adjusting entry for bad debts at year-end, which of these would be included?

For 2013, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance for uncollectible accounts of $86,500 and $2,100, respectively, at December 31, 2012. During 2013, Rahal's credit sales and collections were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written off.

64.

Rahal's accounts receivable at December 31, 2013, are:

65.

Rahal's 2013 bad debt expense is:

66.

Rahal's adjusted allowance for uncollectible accounts at December 31, 2013, is:

67.

The following information pertains to Jacobsen Co.'s accounts receivable at December 31, 2013:



During 2013, Jacobsen wrote off $18,000 in receivables and recovered $6,000 that had been written off in prior years. Jacobsen's December 31, 2012, allowance for uncollectible accounts was $40,000. Under the aging method, what amount of allowance for uncollectible accounts should Jacobsen report at December 31, 2013?

68.

When you use an aging schedule approach for estimating uncollectible accounts:

69.

Which of the following is recorded by a credit to accounts receivable?

70.

If a company uses the balance sheet approach to estimate bad debt expense, bad debt expense for a period can be determined by:

71.

As of January 1, 2013, Farley Co. had a credit balance of $520,000 in its allowance for uncollectible accounts. Based on experience, 2% of Farley's credit sales have been uncollectible. During 2013, Farley wrote off $650,000 of accounts receivable. Credit sales for 2013 were $18,000,000. In its December 31, 2013, balance sheet, what amount should Farley report as allowance for uncollectible accounts?

72.

San Mateo Company had the following account balances at December 31, 2013, before recording bad debt expense for the year:



San Mateo is considering the following approaches for estimating bad debts for 2013:

• Based on 3% of credit sales
• Based on 6% of year-end accounts receivable

What amount should San Mateo charge to bad debt expense at the end of 2013 under each method?

73.

As of December 31, 2012, Gill Co. reported accounts receivable of $216,000 and an allowance for uncollectible accounts of $8,400. During 2013, accounts receivable increased by $22,000, and $7,800 of bad debts were written off. An analysis of Gill Co.'s December 31, 2013, accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for 2013 would be:

74.

As of December 31, 2013, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $311,000 and $970 in the allowance for uncollectible accounts, following 2013 write-offs of $6,450 in bad debts. An analysis of Amy Jo's December 31, 2013, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2013 should be:

75.

Nontrade receivables do not include:

76.

Long-term notes receivable issued for noncash assets at an unrealistically low interest rate will be:

77.

Priscilla's Exotic Pets discounted a note receivable without recourse and the sales criteria were met. The discounting is recorded as:

78.

Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-year, noninterest-bearing note when an equivalent loan would carry 10% interest. Drebin would record sales revenue on the date of sale equal to:

79.

A note receivable Mild Max Cycles discounted with recourse was dishonored on its maturity date. Mild Max would debit:

80.

Baker Inc. acquired equipment from the manufacturer on 10/1/2013 and gave a noninterest-bearing note in exchange. Baker is obligated to pay $918,000 on 4/1/2014 to satisfy the obligation in full. If Baker accrued interest of $9,000 on the note in its 2013 year-end financial statements, what is its imputed annual interest rate?

81.

Frasquita acquired equipment from the manufacturer on 6/30/2013 and gave a noninterest-bearing note in exchange. Frasquita is obligated to pay $550,000 on 4/30/2014 to satisfy the obligation in full. If Frasquita accrued interest of $15,000 on the note in its 2013 year-end financial statements, what amount would it record the equipment on its 6/30/2013 balance sheet?