311 Assignment 10 (Ch 7)

Swifty Corporation has the following items at year-end: Cash in bank $32800 Petty cash 250 Short-term paper with maturity of 2 months 5100 Postdated checks 1340 Swifty should report cash and cash equivalents of:

$38,150 (Cash in Bank + Petty Cash + Short-term paper with maturity of 2 months)

If a company purchases merchandise on terms of 2.2/10, n/30, the cash discount available (assuming a 360-day year) is equivalent to an effective annual interest rate of:

39.6% 0.022 × 360 ÷ 20 = 39.6%.

If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as:

A deduction from sales in the income statement

On July 22, Peter sold $23800 of inventory items on credit with the terms 2/15, net 30. Payment on $15200 sales was received on August 1 and the remaining payment was received on August 12. Assuming Peter uses the gross method of accounting for sales discounts, which one of the following entries was made on August 1 to record the cash received?

Cash 14896 Sales Discount 304 Accounts Receivable 15200

Which of the following items are included in the Cash caption on the balance sheet?

Coins and currency in the cash register, Amounts on deposit in checking account at the bank, Checks from other parties presently in the cash register

Sheffield Corp. made a $25100 sale on account with the following terms: 3/15, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?

Debit Accounts Receivable for $24,347. $25,100 × (1 - 0.03) = $24,347.

Bramble Corp. made a $26200 sale on account with the following terms: 3/10, n/30. If the company uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?

Debit Accounts Receivable for $26,200

Of the approaches to record cash discounts related to accounts receivable, which is more theoretically correct?

Net approach

Under which section of the balance sheet is "cash restricted for plant expansion" reported?

Non-current assets

Which of the following statements is correct regarding receivables?

Receivables are claims held against customers and others for money, goods, or services