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Exam 5: Accounting for Receivables and Inventory Cost Flow

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Question 61

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What are some advantages to a business of accepting credit cards for sales? What cost to the business is involved?

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The major advantages of a business accep...

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Question 62

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Which of the following answers correctly states the effect of recording the collection of the reinstated receivable on April 7,2013?

A) Option A
B) Option B
C) Option C
D) Option D

E) None of the above
F) All of the above

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Question 63

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Kentucky Supply Co.,which had no beginning balance in its Accounts Receivable and Allowance for Doubtful Accounts,earned $80,000 of revenue on account during 2012.During 2012,the company collected $64,000 of cash from its receivables accounts.Kentucky estimates that it will be unable to collect 2% of revenue on account.The amount of net realizable value of receivables on the December 31,2012 balance sheet would be:

What would be the total amount of receivables on Siebens' December 31,2012 balance sheet?

What total amount of cash will Siebens collect on May 31,2013?

If Schulze Company is using LIFO,how would the accountant compute cost of goods sold when recording a sale under the perpetual inventory system?

When prices are falling:

The following information is available for Parsons Corporation,which uses the allowance method of accounting for uncollectible accounts. Parsons expects 1% of sales on account to be uncollectible. Required: a)What is the balance of Accounts Receivable at the end of 2012? b)What is the amount of uncollectible accounts expense for 2012? Use the financial statements model below to indicate the effect of recording uncollectible accounts expense.Include dollar amounts of increases and decreases. c)In 2013,after several attempts of collection,Parsons wrote off accounts that could not be collected in the amount of $300.Use the financial statements model that is provided to indicate the effect of the write-off on the financial statements,indicating amounts of increases and decreases. d)Later in 2013,Erin received a check for $50 from one of the customers whose account had been written off in c)above.Use the financial statements model to indicate the effect of the collection of the $50 on the financial statements,indicating amounts of increases and decreases.

The balance in Accounts Receivable as of December 31,2012 was

Haven Company began 2012 with a balance in Accounts Receivable of $28,000 and a balance in the Allowance for Doubtful Accounts of $1,050.The following events occurred during 2012: 1.Recognized $107,000 of revenue on account 2.Collected $104,500 from accounts receivable 3.Wrote off as uncollectible $920 of accounts receivable 4.Recognized uncollectible accounts expense of $1,070 for the year Required: a.What was the net realizable value of Haven's accounts receivable at the beginning of the year? b.What was Haven's balance in Accounts Receivable on December 31,2012? c.What was the balance in the Allowance for Doubtful Accounts on December 31,2012? d.What was the net realizable value of Haven's accounts receivable on December 31,2012?

How does the collection of an account receivable previously written off affect the financial statements? (Assume the use of the allowance method to account for uncollectible receivables.)

Which of the following correctly shows the effects of the sale on March 1? Assume that the credit card fee is recorded on the date of sale.

Maple Company started the year with no inventory.During the year,it purchased two identical inventory items at different times.The first unit cost $800 and the second,$700.One of the items was sold during the year.Based on this information,how much product cost would be allocated to cost of goods sold and ending inventory,assuming use of a.LIFO b.FIFO c.Weighted average

Warden Company has the following account balances at the end of 2012: Required: Compute the net realizable value of the above accounts receivable.

When a credit card sale is recorded,what is the effect on the accounting equation?

Hardin Company collected a receivable due from a credit card company (from a sale to a customer who paid with a credit card).Show the effect of collection of the credit card receivable on Ulmer's financial statements.

Olin Company had accounts receivable of $449,000.Before it recorded the adjusting entry for uncollectible accounts,the balance in the Allowance for Doubtful Accounts was $870.Olin estimates that it will not collect 3 percent of its accounts receivable.What amount of uncollectible accounts expense should be recorded?

What would be the total amount of assets (related to the note receivable) reported on Muller's balance sheet dated December 31,2012?

A company's gross margin reported on the income statement is not affected by the inventory cost flow method it uses.

Porter Company experienced the following events during 2012: 1.Recognized $8,400 of service revenue on account 2.Wrote off as uncollectible an account receivable in the amount of $27 3.Prepared adjusting entry to recognize uncollectible accounts expense.Porter expected that 1% of service revenue would not be collected Required: Show how each of these events would affect the financial statements model,below.Include dollar amounts of increases and decreases.When an account is not affected by a particular event,indicate with NA.