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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Problem 4-3. Luft Corporation’s accounts had the following beginning balances: Account | | Dr. | | Cr. | Accounts Payable | | | | $ | 3‚070 | Accounts Receivable | | $ | 2‚160 | | | Accumulated Depreciation | | | | 2‚800 | Allowance for doubtful accounts | | | | 70 | Cash | | | | 1‚440 | | | Fixed Assets (at cost) | | | 6‚200 | | | Inventories | | | | 1‚730 | | | Note Payable (current) | | | | | 600 | Owner’s Equity | |
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ACTIVITY 2.4 Q1 (A number of alternative solutions are possible) a) 1. Collected amount due from a customer (increase cash‚ decrease receivables). 2. Purchased land for cash (increase land and decrease cash). b) Paid amount due a creditor (decrease cash‚ decrease accounts payable). c) 1. Owner withdrew cash (decrease cash‚ decrease owner’s capital). 2. Paid rent (decrease cash‚ decrease owner’s capital). 3. Reflected supplies expense (decrease supplies on hand‚ decrease owner’s capital). d) Borrowed
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carrier‚ the company Conclusion #1 The company has sold its accounts receivable to a nonconsolidated multi-seller securitization vehicle. In return‚ the company received cash and beneficial interest to reduce its own bank debt. During the year‚ $11 million of receivables were sold. How is this transaction treated in the cash flow statement? In addition‚ is there a timing issue? Issue #2 The company has sold its accounts receivable to a nonconsolidated multi-seller securitization vehicle. In return
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