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Exam 5: Accounting for Receivables and Inventory Cost Flow

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Question 31

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Green Bay Corporation used the allowance method to account for uncollectible accounts expense.On June 20,2012,Green Bay wrote off an uncollectible account in the amount of $3,000.On September 1,2012,the account was collected.How would the appropriate entries on September 1 affect the financial statements?

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Question 32

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Zephyr Sewing Machine Company makes many of its sales on account.For 2012,its beginning balance in Accounts Receivable was $91,000.Sales on account for the year were $412,000,and the amount of cash collected from its accounts receivable was $394,950.During the year,uncollectible accounts of $4,050 were written off.What was the ending balance in Accounts Receivable?

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Question 33

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The specific identification inventory method is not practical for companies that sell many low-priced,high turnover items.

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

The practice of reporting the net realizable value of receivables in the financial statements is commonly called:

An aging of Sernett Company's accounts receivable at the end of 2012 yielded the following information about the lengths of time that the receivables had been outstanding:

On October 1,2012,Balkan,Inc.accepted from another corporation a 1-year note receivable in the amount of $15,000,with an interest rate of 6%.How did this transaction affect Balkan's financial statements?

The adjusting entry to recognize uncollectible accounts expense is an asset use transaction.

In an inflationary period,which cost flow method,LIFO or FIFO,will result in the larger amount of assets on the balance sheet? Explain.

When a company accepts a credit card payment for a sale,the amount of sales revenue to be recorded is reduced by the amount of the credit card company's fee.

The person responsible for making payment on a promissory note is referred to as the payer.

Rosierre Company purchased two identical inventory items.One of the items cost $6.00 and was purchased in January.The other was purchased in February,and the company paid $7.00 for this item.One of the items was sold in March at a price of $10.00.Select the correct answer assuming that Rosierre uses a FIFO cost flow assumption.

Which of the following answers correctly shows the effect of the December 31,2012 adjusting entry for uncollectible accounts on the financial statements of the Landon Corporation?

On January 1,2012,Howe Company's Accounts Receivable balance was $10,000 and the balance in the Allowance for Doubtful Accounts was $500.On January 5,2012,a $200 uncollectible account was written-off as uncollectible.Assuming that no other transactions related to accounts receivable had occurred,the net realizable value of accounts receivable immediately after the write-off was

What would be the amount of cash flow from operating activities (related to the note receivable) on the 2012 statement of cash flows?

On December 31,2012,Stuart Co.estimated it had $8,000 of uncollectible accounts related to credit sales it made during the year.Stuart,which uses the allowance method,made the proper adjusting entry on this date.Indicate the effects of the adjusting entry.

The principal on a promissory note is the person to whom the note is payable.

On December 31,2012,Stuart Co.estimated it had $8,000 of uncollectible accounts related to credit sales it made during the year.Stuart,which uses the allowance method,made the proper adjusting entry on this date.Indicate the effects of the adjusting entry.

The best estimate for the amount of cash a company expects to collect from its accounts receivable is the face value of the receivables.

How would a company estimate the percentage of its sales that will be uncollectible?