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Exam 8: Accounting for Receivables

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Question 31

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A $20,000, 3-month, 8% note is dated June 1, 2016. The maturity date and maturity value of the note are, respectively:

A) September 1, 2016; $20,400
B) August 29, 2016; $20,400
C) September 1, 2016; $400
D) August 29, 2016; $20,000

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

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Question 32

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A $30,000, 120-day, 9% note is dated April 30, 2019. The maturity date and maturity value of the note are, respectively:

A) August 31, 2016; $32,960
B) August 28, 2016; $30,900
C) September 1, 2016; $32,960
D) August 28, 2016; $960

E) All of the above
F) A) and C)

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Question 33

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Thor Company's Accounts Receivable account has a balance of $800,000 at the end of the year, and the company estimates the Net Realizable Value of Accounts Receivable to be $768,000. The Allowance for Doubtful Accounts has a credit balance of $18,000 at the beginning of the current year, and during the year, Thor wrote off $15,000 of accounts receivable. The year-end adjusting entry would require a:

During 2019, Neptune Company's credit sales were $786,000, and its cash collections from credit customers were $750,000. Also, $10,800 in doubtful accounts receivable were written off (using the allowance method) during the year. On December 31, 2019, the company's Accounts Receivable balance was $150,000. What must have been the balance of accounts receivables on January 1, 2019?

Robbie Company paid Hoover Company for merchandise with an $8,000, 60-day, 9% note dated April 1. If Robbie Company pays the note at maturity, what entry should Hoover make at that time?

At December 31 of the current year, Mars Company had a balance of $728,000 in its Accounts Receivable account and a credit balance of $6,000 in the Allowance for Doubtful Accounts. The company has aged its accounts as follows: In the past, the company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over 180 days past due. The company bases its bad debts expense on the aging analysis. Required: a. Prepare the adjusting journal entry to record the bad debts expense for the year. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. c. On January 15 of the subsequent year, Mars Company wrote off the account of Ares, $2,400. Give the entry for the write-off. d. On February 20 of the subsequent year, Mars Company collected the $2,400 on the Ares account written off on January 15. Give the entry or entries for the recovery.

On December 31, 2019, Paper Company's accounts receivable balance was of $600,000, and an analysis of their accounts receivable suggests that the Allowance for Doubtful Accounts should be 2% of accounts receivable. The balance in the Allowance for Doubtful Accounts on January 1, 2019 was $11,940 (credit) . During the year 2019, Paper wrote off $12,900 of bad debts. What amount should be reported as the Bad debt expense for the year 2019?

Zihao, Inc. provided the following aging of its receivables at December 31. During the year, $12,512 of receivables were written off. The balance at the beginning of the year in the allowance account was $12,000. Required: a. How much will Zihao report as bad debts expense for the year? b. How much is the net value of Zihao's receivables at year end?

Scorpion Company has net credit sales of $5,400,000 for the year and it estimates that doubtful accounts will be 2% of sales. If its Allowance for Doubtful Accounts has a credit balance of $18,000 prior to adjustment, its balance after adjustment will be a credit of:

A $60,000, 3-month, 8% note is dated June 1, 2019. The maturity date and maturity value of the note are, respectively:

At the beginning of 2019, Page Company's allowance for doubtful accounts is $24,000. During 2019, $8,500 was written off as uncollectible. On December 31, 2019, Page Company used an aging schedule of accounts receivable and determined that $21,060 of the accounts receivable would probably be uncollectible. What would be the bad debts expense that should be reported on Page Company's 2019 income statement?

Crescent Company reported total sales for the current year to be $5,000,000, including cash sales of $1,000,000. Management estimates bad debts to be 5% of credit sales. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $20,000. The ending balance of the Allowance for Doubtful Accounts after adjustment will be:

New Zealand, Inc. had a $140,000 beginning balance in Accounts Receivable and a $5,000 credit balance in the Allowance for Doubtful Accounts. During the year, credit sales were $800,000 and customers' accounts collected were $810,000. Also, $4,000 in worthless accounts were written off. An aging of the accounts indicates that 5% of the end-of-the-year Accounts Receivable balance is doubtful for collection. What amount of Bad Debts Expense should be provided at year-end?

Feldman's Allowance for Doubtful Accounts had a credit balance of $12,600 on January 1, 2019. During 2019, the company wrote off $10,200 of Accounts Receivable as uncollectible. The company prepared the following summary schedule from an aging of accounts receivable outstanding on December 31, 2019: Determine the Bad debts Expense to be recorded on December 31, 2019.

At December 31, 2019, Carl's Toys had a balance of $248,100 in its Accounts Receivable account and a credit balance of $900 in its Allowance for Doubtful Accounts account. Carl's Toys analyzed and aged its accounts receivable based on the following estimated uncollectible amounts: The company bases its provision for credit losses on the aging analysis. Required: a. What amount of bad debt expense will Carl's Toys report in its 2019 income statement? (Round to nearest whole dollar amount.) b. How would Accounts Receivable and the Allowance for Doubtful Accounts appear in its December 31, 2019, balance sheet?

Assume the following unadjusted account balances at the end of the accounting period for Candy Crunch Palace: Accounts Receivable, $90,000; Allowance for Doubtful Accounts, $1,000 (credit balance) ; and Sales revenue $600,000. If Candy Crunch Palace ages the accounts and determines that $5,000 of receivables may be uncollectible, the adjusting entry should be:

Prior to the write off of a $500 customer account, Parthenon Company had the following account balances: The net realizable value of the Accounts Receivable before and after the write-off was: Before After

A $90,000, 120-day, 9% note is dated April 30, 2019. The maturity date and maturity value of the note are, respectively:

Lakeside Company is holding a $18,000, 90-day, 6% note receivable, dated December 1, 2019. The journal entry to record accrued interest at the end of its fiscal year on December 31, 2019 will include a:

An aging of Coco Company's accounts receivable indicates that $60,000 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $9,000 credit balance, the adjustment to record bad debts for the period will require a: