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Exam 8: Receivables

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Question 51

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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

A) credit to Notes Receivable for $20,300
B) debit to Interest Receivable for $300
C) credit to Interest Revenue for $300
D) debit to Notes Receivable for $20,000

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

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Question 52

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Discuss the similarities and differences between accounts receivables,notes receivables and other receivables.

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Accounts receivables result from the sal...

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Question 53

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Accounts Receivable Turnover measures

Mr.Potts issued a 90-day,7% note for $200,000,dated February 3rd to Valley Co.on account.(Assume a 360-day year when calculating interest. ) a.Determine the due date of the note. b.Determine the interest. c.Determine the maturity value of the note. d.Journalize the entry to record the issuance of the note by Potts on Feb.3. e.Journalize the entry to record the receipt of payment of the note at maturity by Valley Co.

The maturity value of a 12%,60-day note for $5,000 is $5,600.

The following are the current assets from Hanes Co.as of December 31,2014: Prepare the current asset section of the balance sheet.

Journalize the following transactions using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs,$7,200.The cost of the merchandise is $5,400. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct.11 Reinstated the account of Jim Dobbs and received cash in full payment.

Other receivables include non trade receivables such as loans to company officers.

The balance of the Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

Of the two methods of accounting for uncollectible receivables,the allowance method provides in advance for uncollectible receivables.

A $6,000,60-day,12% note recorded on November 21 is not paid by the maker at maturity.The journal entry to recognize this event is

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?

The number of days' sales in receivables is an estimate of the length of time the accounts receivables have been outstanding.

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Determine the due date and amount of interest due at maturity on the following notes:

At the beginning of the year,the balance in the Allowance for Doubtful Accounts is a credit of $760.During the year,$120 of previously written-off accounts were reinstated and accounts totaling $740 are written-off as uncollectible.The end of the year balance (before adjustment) in the Allowance for Doubtful Accounts should be

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables: Feb 20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible. May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment.

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

The direct write-off method of accounting for uncollectible accounts

The equation for computing interest on an interest-bearing note is as follows: interest equals maturity value times interest rate times time.