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Exam 9: Receivables

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Question 1

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Interest on a $60,000 note at 10% for 45 days is $740.(Use a 360 day year.Round your answer to the nearest dollar. )

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Question 2

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Under the direct write-off method,which of the following is included in the entry to write off an uncollectible account?

A) a credit to the Allowance for Bad Debts
B) a credit to the customer's Account Receivable
C) a debit to Allowance for Uncollectible Accounts
D) No entry is made to write off uncollectible accounts.

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Question 3

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McFadden Clothing Store reported the following selected items at June 30,2017 (last year - 2016 - amounts are also given as needed): Compute McFadden's accounts receivable turnover ratio 2017.Show your computations.(Round the answer to 2 decimal places. )

Sunrays,Inc.wrote off the account of one of its customers,Brad Doe,in 2016 for $500.On January 21,2017,Brad unexpectedly repaid his account in full.The company uses the direct write-off method to account for uncollectible receivables.Journalize the entries required for Sunrays,Inc.on January 21,2017.

The following selected transactions occurred during 2016 for Mitchell Movers.The company ends it accounting year on December 31. Prepare the journal entries to record these transactions.

Two methods of estimating uncollectible receivables are ________.

The higher the acid-test ratio,the less able the business is to pay its current liabilities.

Prepare the journal entry to record an uncollectible account receivable of $10,000,using the direct write-off method.

When a business accepts payment by credit cards or debit cards,a fee is paid to the card processor.

The collection period of accounts receivable is usually long: therefore,it is classified as a long-term asset on the balance sheet.

On December 1,2017,Going Places,Inc.sold machinery to a customer for $25,000.The customer could not pay at the time of sale but agreed to pay 9 months later and signed an 9-month note at 9% interest.What was the total amount of cash collected by Going Places on the maturity of the note? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

The days' sales in receivables ratio indicates the number of days it takes to collect the average level of accounts receivable.

A company reports net accounts receivable of $154,000 on its December 31,2017 balance sheet.The Allowance for Bad Debts has a credit balance of $17,000.What is the balance of Accounts Receivable?

If the maker of a note does not pay at maturity,________.

The net realizable value of Accounts Receivable is calculated by subtracting Bad Debts Expense from Accounts Receivable.

When using the allowance method,the receipt of a payment on receivables that have been written-off requires an entry to reverse the write-off to the Allowance for Bad Debts account and an entry to record the receipt of cash.

What is net realizable value? How is net realizable value affected when a receivable is written off under the allowance method?

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense.The company's management estimates that 2% of net credit sales will be uncollectible for the year 2017.Net credit sales for the year were $250,000.Prepare the journal entry to record the bad debts expense on December 31,2017.

Which of the following is included in the category of other receivables?

Accounts receivable are also known as trade receivables.