ACG 2021 Q. 8

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Industrial Equipment Supply is a new business. During its first year of​ operations, credit sales were $ 42 comma 000 and collections of credit sales were $ 35 comma 000. One​ account, $ 700​, was written off. Management uses the agingminusofminusreceivables method to account for bad debts expense and estimated $ 525 as uncollectible at year end. The ending balance of the Allowance for Bad Debts is​ ________.

$525

What is the acidminustest ratio for a merchant with the following account​ balances? (Round your answer to two decimal​ places.) Cash $ 23 comma 000 Shortminusterm investments 44 comma 000 Net current receivables 50 comma 000 Merchandise inventory 95 comma 000 Total current liabilities 280 comma 000

.42

On December​ 1, 2020,​ Eagle, Inc. sold machinery to a customer for $ 25 comma 000. The customer could not pay at the time of sale but agreed to pay 9 months later and signed a 9minusmonth note at 8​% interest. How much interest revenue was earned for the entire term of the​ note? (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

1,500

The following information is from the records of Chicago​ Photography: Accounts​ Receivable, December​ 31, 2019 $ 22 comma 000​ (debit) Allowance for Bad​ Debts, December​ 31, 2019 prior to adjustment 800​ (debit) Net credit sales for 2019 93 comma 000 Accounts written off as uncollectible during 2019 350 Bad debts expense is estimated by the agingminusofminusreceivables method. Management estimates that $ 3 comma 050 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts.

18,950

On January​ 1, Five Star Services has the following​ balances: Accounts Receivable $ 26 comma 000 ​(debit) Bad Debts Expense $ 0 Five Star Services has the following transactions during​ January: Credit sales of $ 110 comma 000​, collections of credit sales of $ 87 comma 000​, and writeminusoffs of $ 15 comma 000. Five Star Services uses the direct writeminusoff method. At the end of​ January, the balance of Accounts Receivable is​ ________.

34,000

The maturity date for a​ six-month note issued on January 15 would be​ ________.

July 15

On July​ 7, Aminus1 Credit Union loaned $ 450 comma 000 to Bridal Retail Shop on a 90​ day, 5​% note. What is the maturity date of the​ note?

October 5

Which of the following statements regarding receivables is​ correct?

Receivables occur when a business loans money to another party.

The accounts receivable turnover ratio measures​ ________.

the number of times a company collects the average accounts receivable balance in a year

Two methods of estimating uncollectible receivables are​ ________.

the​ aging-of-accounts-receivable method and the​ percent-of-sales method


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