P9-4A Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year end. Number of Days Outstanding Total 0-30 31-60 61-90 91-120 Over 120 Accounts receivable $375‚000 $220‚000 $90‚000 $40‚000 $10‚000 $15‚000 % uncollectible 1% 4% 5% 8% 10% Calculate the total estimated bad debts based on the above information. Total Accounts receivable % uncollectible Estimated bad debts $375‚000 0-30 $220‚000 1% 31-60
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Chapter 7 Inventories 6. Ending inventory is made up of the oldest purchases when a company uses a. first-in‚ first-out b. last-in‚ first-out c. average cost d. retail method 11. The inventory method that assigns the most recent costs to cost of goods sold is a. FIFO b. LIFO c. Average d. specific identification 12. Inventory costing methods place primary emphasis on assumptions about a. flow of goods b. flow of costs c. flow of goods or flow of costs depending on the method d. neither flow
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occurrence Audit Objectives: Substantiate the existence of receivables and the occurrence of revenue transactions. Prove none of the account receivables are fictitious. Completeness Audit objectives: Establish the completeness of receivables and revenue transactions. Rights and obligations Audit objectives: Determine the client has rights to the recorded receivables. Prove the accounts receivable are collectible in the normal course of business and
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label product to Fountain of Youth Spas increased SNC’s EBIT margin‚ only modestly resulting in increased accounts receivable and inventory balances. Revenue’16’17’1801K2K Opportunity EBIT’16’17’180250500 Opportunity Free Cash Flow’16’17’180-500-250250 Phase 1: 2013 - 2015 Synopsis You selected Acquire a New Customer‚ and Leverage Supplier Discount and declined Tighten Accounts Receivable‚ and Drop Poorly Selling Products . Below is a synopsis of how each opportunity affected your Working Capital
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Level of Learning: 1 9. A decrease in cash dividends payable means that dividends declared were less than dividends paid. Answer: True Learning Objective: 4 Level of Learning: 2 10. When one enters a $50‚000 credit entry to the Land account in a spreadsheet for the statement of cash flows‚ it
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CH. 3 HOMEWORK DISCUSSION QUESTION 3‚ 4 & 5 3.) Bill Simon says‚ “We should get rid of the FASB and SEC since free market forces will make sure that companies report reliable information.” Do you agree? Why or why not? I disagree for several reasons. One‚ investors view profits a measure of managers’ performance‚ therefore giving managers an incentive to use their accounting discretion to distort reported profits by making biased assumptions. Many top managers receive bonus compensation if they
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should have a credit and collections policy in order to protect your accounts receivable. You probably go to great lengths to conceive (or license)‚ design‚ manufacture‚ warehouse‚ market‚ sell and ship great product. Obviously‚ these are essential to your businesses success. For without great product‚ in stock‚ how can you make sales? But a sale that doesn’t get paid is not a sale. It is a loss. Your company’s accounts receivable is a short-term asset. Along with cash and inventory is one of the
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DQ 1 Week4 You notice that your accounts receivable days outstanding have doubled in the first 6 months. Do you give someone a bonus or put him or her on probation? Why? Just because the accounts receivable days outstanding have doubled in the first 6 months does not mean that someone gets a bonus or is put on probation. There is not enough information given in this question to warrant such action. This type of action is jumping to conclusions and assuming without the evidence to substantiate
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1 the two key figures that gave us this indication was the high inventory turnover ratio‚ above average accounts receivable. As an online business normally inventories move fast due to the item being shipped as soon as it has been sold. In using dell computers as an example we saw a similar high turnover ratio. As being a supplier for business as well as personal computers the account receivable figure would also match
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take an accounting course. | d. | Only to financial analysts and brokers. | __D__ 5. Which set of items below are current assets? a. | Accounts receivable‚ net income‚ inventory‚ and dividends | b. | Cash‚ accounts receivable‚ capital stock‚ and sales | c. | Net income‚ cash‚ office supplies‚ and inventory | d. | Cash‚ accounts receivable‚ inventory‚ and office supplies | __B__ 6. For several years‚ Malcom Corporation has had a current ratio that was consistent with other companies
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