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Exam 9: Receivables

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Question 71

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Journalize the following transactions for Scott Company: Nov. 4 Received a $6,500, 90-day, 6% note from Michael Tims in payment of his account. Dec. 31 Accrued interest on the Tims note. Feb. 2 Received the amount due from Tims on his note. $\begin{array} { | c | c | c | c | c | } \hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline\end{array}$

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??? $6,500 × 6% × 5...

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Question 72

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At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.​Determine the net realizable value of accounts receivable after adjustment. (Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts.) ​

A) $550,000
B) $544,500
C) $525,000
D) $575,000

E) B) and D)
F) All of the above

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Question 73

Multiple Choice

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Current assets are usually listed in order

Determine the due date and amount of interest due at maturity on the following notes:? $\begin{array}{llccccc}&\begin{array}{c}\text { Origination } \\\text { Date }\end{array} & \begin{array}{c}\text { Face } \\\text { Amount }\end{array} & \begin{array}{c}\text { Term } \\\text { of Note }\end{array} & \begin{array}{c}\text { Interest } \\\text { Rate }\end{array} & \begin{array}{c}\text { Maturity } \\\text { Date }\end{array} & \begin{array}{c}\text { Interest } \\\text { Amount }\end{array} \\(a)&\text { Mar. 15 } & \$ 8,000 & 60 \text { days } & 9 \% & \_\_\_\_\_\_\_ & \_\_\_\_\_\_\_ \\(b)&\text { May 1 } & 12,000 & 90 \text { days } & 8 \% & \_\_\_\_\_\_\_ &\_\_\_\_\_\_\_ \\\end{array}$

A company uses the allowance method to account for uncollectible accounts receivable. When the firm writes off a specific customer's account receivable,

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment) , and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?

An account becomes uncollectible

A note receivable due in 18 months is listed on the balance sheet under the caption

For a business that uses the allowance method of accounting for uncollectible receivables: (a)Journalize the entries to record the following: (1)Record the adjusting entry at December 31, the end of the first fiscal year, to record the bad debt expense. The accounts receivable account has a balance of $800,000, and the contra asset account before adjustment has a debit balance of $600. Analysis of the receivables indicates uncollectible receivables of $18,000. (2)In March of the next year, the $350 owed by Fronk Co. on account is written off as uncollectible. (3)In November of the next year, $200 of the Fronk Co. account is reinstated and payment of that amount is received. (4)In December of the next year, $400 is received on the $600 owed by Dodger Co. and the remainder is written off as uncollectible. (b)Redo the entries in steps (2), (3), and (4) assuming the company uses the direct write-off method.

The allowance method of estimating uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivable are uncollectible. Allowance for Doubtful Accounts has a debit balance of $110. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of

At the end of the current year, Accounts Receivable has a balance of $675,000; Allowance for Doubtful Accounts has a debit balance of $5,400; and sales for the year total $3,000,000. An analysis of receivables indicates the uncollectible receivables are estimated to be $45,000.?Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $20,000 face value and 6% interest. On October 30, the journal entry to record the collection of the note should include a

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

Match each description to the appropriate term (a-d) . Each term may be used more than once. -This method records bad debts when specific accounts are deemed uncollectible.

The accounts receivable turnover measures

An aging of a company's accounts receivable indicates that the estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require a

Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account.Required (a)Determine the due date of the note. (b)Determine the maturity value of the note. (c)Journalize the entry to record the receipt of the payment of the note at maturity.

The direct write-off method records bad debt expense in the year the specific account receivable is determined to be uncollectible.

Stephanie Roe utilizes the direct write-off method of accounting for uncollectible receivables. On September 15, she is notified by the attorneys for Jacob Marley that Jacob Marley is bankrupt and no cash is expected in the liquidation of Jacob Marley. Write off the $675 of accounts receivable due from Jacob Marley.

Match each description to the appropriate term (a-i) . -A receivable created from selling merchandise or services on account