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Exam 6: Reporting and Interpreting Sales Revenue,receivables,and Cash

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Question 61

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On June 1,2019,Concorde Company sold merchandise on credit at an invoice price of $1,000;terms 2/10,n/30. Prepare the journal entries to record the following: A.To record the sale. B.Assumption A: To record collection on June 28,2019. C.Assumption B: To record collection on June 9,2019.

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Question 62

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Matrix Corp.reported the following figures from its financial statements for the years 2018 through 2020. A.Calculate for 2020: 1.Accounts receivable turnover 2.Average collection period B.Calculate for 2019: 1.Accounts receivable turnover 2.Average collection period C.Interpret the receivables turnover and the average collection period,in general.Comment on the change in the ratio results from 2019 to 2020.Then discuss how the trend in sales from 2018 to 2019 and 2020 may have affected the change in the ratios from 2019 to 2020.

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A.1.2020 Accounts receivable turnover 10...

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Question 63

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Which of the following statements does not correctly describe the allowance for doubtful accounts balance?

The Conner Company's August 31 pre-reconciliation cash balance on its books was $90,000.As of August 31,outstanding checks total $44,000 and deposits in transit total $30,000.Assuming there are no other reconciling items,what was the August 31 cash balance on Conner's bank statement?

Which of the following does not correctly describe the effect of a credit card discount?

The allowance for doubtful accounts is reported as a contra-asset on the balance sheet.

Which of the following demonstrates a poor internal control procedure?

A company purchased goods on credit with credit terms of 3/15,n/45.Although the company does not have cash available to pay within the discount period,the manager of the company is considering borrowing money to take advantage of the discount.In order to make the appropriate decision,the manager computed the annual interest rate associated with the sales discount.Which of the following is the annual interest rate (rounded) ? (Use 365 days a year)

Which of the following correctly describes the following journal entry?

The Roscoe Company's March 31 bank statement balance was $70,000.As of March 31,outstanding checks total $22,000 and deposits in transit total $15,000.Assuming there are no other reconciling items,what was the March 31 cash balance on Roscoe's books?

The following data were taken from the records of Lilo Corporation for the year ended December 31,2019 before any adjustment for bad debt expense: The following items have not been included in above amounts: Estimated bad debt expense is 1% of credit sales. The income tax rate is 35%. 10,000 of shares of common stock are outstanding. A.Calculate the bad debt expense. B.Prepare a multiple-step income statement (including gross profit,income before income taxes,and earnings per share).

Which of the following statements is correct?

When a particular account receivable is determined to be uncollectible,the journal entry to write off the account reduces cash.

Which of the following is correct when bad debt expense is recorded at year-end?

Illinois Company prepared the following bank reconciliation at May 31: Required: Prepare the necessary journal entries for Illinois Company required by the May 31 bank reconciliation.

Dally Company has just finished preparing its bank reconciliation.If everything was done correctly,which of the following items would be reported as a deduction from the company's ending balance per the bank?

Superior Company has provided you with the following information before any year-end adjustments: Net credit sales are $120,000. Historical percentage of credit losses is 2%. Allowance for doubtful accounts has a credit balance of $300. Accounts receivables ending balance is $47,000. What is the estimated bad debt expense using the percentage of credit sales method?

Prior to the year-end adjustment to record bad debt expense for 2019 the general ledger of Stickler Company included the following accounts and balances: Cash collections on accounts receivable during 2019 amounted to $450,000.Sales revenue during 2019 amounted to $800,000,of which 75% was on credit,and it was estimated that 2% of these credit sales made in 2019 would ultimately become uncollectible. A.Calculate the bad debt expense for 2019. B.Determine the adjusted 2019 year-end balance of the allowance for doubtful accounts. C.Determine the net realizable value of accounts receivable for the December 31,2019 balance sheet.

Deposits in transit are deducted from the bank balance when preparing the bank reconciliation.

Newark Company has provided the following information: • Cash sales,$450,000 • Credit sales,$1,350,000 • Selling and administrative expenses,$330,000 • Sales returns and allowances,$90,000 • Gross profit,$1,360,000 • Increase in accounts receivable,$55,000 • Bad debt expense,$33,000 • Sales discounts,$43,000 • Net income,$1,030,000 - How much are Newark's net sales?