solutions. Let ideas flow without judging them. Example: -Defer pension plan contributions to increase available cash. -Sell off bad debt and coordinate a collections effort to obtain outstanding patient receivables. -Assess and reduce inventory levels immediately. -Temporarily halt Accounts Payable to conserve cash. -Execute a temporary staff pay reduction to reduce outgoing cash. 3. Determine the criteria or criterion that will be used to evaluate the alternatives. Problems that involve
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the liability account Loan Payable. May 5 Provided $1‚000 of services to Jason Ratchford‚ a client‚ on account. $1‚000 The asset‚ Accounts Receivable (representing amounts due from customers for work already rendered)‚ is increased‚ which is matched with an increase in Revenues‚ Income‚ and Equity. May 9 Paid $1‚250 of salaries to an employee. $1‚250 Cash is decreased‚ as is Income/Equity via the recording of Wages Expense. May 14 Acquired a new computer for $4‚200‚ on account. $4‚200 Supplies
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Employees 7. Financing activities involve obtaining __________ to operate a business. a. products b. customers c. business incentives d. funds 8. When a business borrows money‚ it incurs a(n) a. tax. b. liability. c. receivable. d. additional equity. 9. Shares of ownership are evidenced by issuing a. bonds payable. b. commercial paper. c. shares of stock. d. notes payable. 10. The resources a business owns are called a. assets. b. liabilities
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savings accounts. b. money orders from customers. c. compensating balances. d. IOUs from customers. ANS: D PTS: 1 OBJ: LO1 NAT: AACSB correlation: analytic LOC: Learning Type: Recall KEY: cash and cash equivalents 2. A company’s acceptance of credit cards like Visa is an example of a. securitization. b. factoring with recourse. c. discounting. d. factoring without recourse. ANS: D PTS: 1 OBJ: LO1 NAT: AACSB correlation: analytic LOC: Learning Type: Comprehension KEY: financing receivables 3
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explanations. (Note‚ enter all accounts in one box. The dates have been included to help with formatting). Date Account Titles and Explanation Debit Credit 1 Accounts Receivable Sales Revenue $3‚600‚000 $3‚600‚000 (To record sales on account) 2 Sales Returns and Allowances Accounts Receivable $150‚000 $150‚000 (To record merchandise returned) 3 Cash Accounts Receivable $3‚100‚000 $3‚100‚000
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intermediate 1 points Save Remington Corporation had accounts receivable of $100‚000 at 1/1. The only transactions affecting accounts receivable were sales of $600‚000 and cash collections of $550‚000. The accounts receivable turnover is A. 4.0. B. 4.8. C. 4.4. D. 6.0. 1 points Save The percentage-of-receivables approach of estimating uncollectible accounts emphasizes matching over valuation of accounts receivable. True False 1 points Save Which
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expects that 9 percent of the new accounts will be uncollectible. Collection costs are 5 percent of new sales‚ production and selling costs are 78 percent‚ and accounts receivable turnover is five times. Assume income taxes of 30 percent and an increase in sales of $80‚000. No other asset buildup will be required to service the new accounts. a. What is the level of accounts receivable needed to support this sales expansion? Investment in Accounts receivables = 80‚000/ 5 = $16‚000 b. What would
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The following items appeared in the accounting records of Triguero’s‚ a retail music store that also sponsors concerts. Classify each of the items as an asset‚ liability‚ revenue‚ or expense from the company’s viewpoint. Also indicate the normal account balance of each item. Classification Normal Balance a. The albums‚ tapes‚ and CDs held for sale to customers A Debit b
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36‚000 Total 2014 gross profit $71‚000 Requirement 2 2013 deferred gross profit balance: 2013 initial gross profit ($360‚000 – 234‚000) $126‚000 Less: Gross profit recognized in 2013 (52‚500) Balance in deferred gross profit account $73‚500 2014 deferred gross profit balance: 2013 initial gross profit ($360‚000 – 234‚000) $ 126‚000 Less: Gross profit recognized in 2013 (52‚500) Gross profit recognized in
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(c) July Sale Entry. Accounts Receivable 16‚000‚000 Allowance for Returns 1‚920‚000 ($16‚000‚000 X 12%) Sales Revenue—Texts 14‚080‚000 (d) October Collection. Cash 14‚000‚000 Sales Revenue—Texts* 80‚000 Allowance for Returns 1‚920‚000 Accounts Receivable 16‚000‚000 *A debit to either Sales Revenue—Texts or Sales Returns could be made here. EXERCISE 18-2 (15-20 minutes) (a) 1. 6/3 Accounts Receivable—Kim Rhode 5‚000 Sales 5‚000
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