FILL-IN-THE BLANK-PRINCIPLES AND TERMINOLOGY amounts in the Answers column, the
ID: 2584392 • Letter: F
Question
FILL-IN-THE BLANK-PRINCIPLES AND TERMINOLOGY amounts in the Answers column, the following questions or complete the statements by writing the appropriate words or Sooring 0. The party purchasing a company's receivables is called a(n) 1. Alowance for Doubeful Accounts has a credit balance of $3,000 at the end of the year, before adjustments. Salies for the year amounted year to $1,950,000, and sales returns and allowances amounted to $50,000. uneolecible accounts expense is estimated at 1% of pet sales. the amount of the appropriate adjusting entry will be 2 It instead of a percentage of net sales, the adjusting entry in Question s based on an analysis of receivables that indicates doubtful accounts of $10,500, the amount of the adjustment wil be 2 3. Alowance for Doubtful Accounts has a debit balance of $500 at the end of the year, before adjustment. If an analysis of receivables indicates doubeful accounts of $9,000, the amount of the appropriate adjusting entry wi be 4, The maturity value of a $75,000, 180-day, 4% noto receivable is 8. In writing off an uncolectible account by the direct write-off method, the account credited is 6. At the end of the fiscal year, after the accounts are closed, Accounts Receivable has a balance of $900,000, and Allowance for Doubtful Accounts has a balance of $75,000. What is the expected net realizable value of the receivables? Where on the balance sheet would receivables that are expected to be realized in cash within one year be reported? Allowance for Doubtful Accounts is listed on the appropriate financial statement in the subsection titied 7. 8. 9. Notes receivable expected to be collected in 1 ½ years are listed on the financial statements in the subsection titled 10· if the receivable turnover is 10, how many days are the receivables outstanding, on the average? 10.Explanation / Answer
1. current credit balance = 3000
uncolletable accounts estimate = 1% X (1950000-50000) = 19000
Adjustment entry = 16000
2.
current credit balance = 3000
doubtfyl accounts on analysis = 10500
adjustment entry = 7500
3.
Debit balance = 500
doubtful balance on analysis i.e credit balance should be = 9000
adjustment entry = 9500
4.
Maturity value = 75000 + 75000 X 4% X 180/360 = 1500
5.
accounts receivable a/c
6.
net realizable value = 900000-75000=825000
7.
CURRENT ASSET
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