Accounts Receivable Homework – Financial Accounting

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Accounts Receivable Homework, Financial Accounting Fundamentals

The key terms in these Financial Accounting chapters include Accounts Receivable Homework, Accounts Payable, Inventory, Cost of Goods Sold, Perpetual Inventory, Accounts Receivable, Debit And Credit Accounts, Ending Inventory. Financial Accounting Fundamentals Final Quiz.


Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $14,162. Franklin’s August bank statement shows $15,037 on deposit in the bank. Determine the adjusted cash balance using the following information:
 

  
Deposit in transit$4,800
Outstanding checks$4,100
Bank service fees, not yet recorded by company$60
The bank collected on a note receivable, not yet recorded by the company$1,635


The adjusted cash balance should be:

$19,837

 $10,937.

$15,797

$14,102

$15,737 – Correct

Explanation
    
Bank balance$15,037Book balance$14,162
+ Deposit in transit 4,800Bank service fees -60
– Outstanding checks -4,100Note collected 1,635
Adjusted bank balance$15,737Adjusted book balance$15,737

The interest accrued on $3,600 at 7% for 30 days is: (Use 360 days a year.)

$126.

$25.

$294.

$21. Correct

$29.

Explanation

$3,600 × 0.07 × 30/360 = $21


Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $4,100 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

Accounts Receivable—A. Hopkins4,100 
Allowance for Doubtful Accounts 4,100
Allowance for Doubtful Accounts4,100 
Bad debts expense 4,100
Accounts Receivable—A. Hopkins4,100 
Bad debts expense 4,100
Cash4,100 
Accounts Receivable—A. Hopkins 4,100
Allowance for Doubtful Accounts4,100 
Accounts Receivable—A. Hopkins 4,100

Correct

Cash4,100 
Accounts Receivable—A. Hopkins 4,100

On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $98,500; Allowance for Doubtful Accounts, credit balance of $1,091. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

$2,849. – Correct

$1,091.

$1,957.

$5,031.

$3,940.

Explanation
     
Desired balance in allowance account:$98,500 × 0.04 =$3,940credit
Current balance in allowance account:  −1,091credit
Required: amount of Bad Debts Expense: $2,849credit

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $675. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Bad Debts Expense24,750 
Allowance for Doubtful Accounts 24,750
Bad Debts Expense24,075 
Allowance for Doubtful Accounts 24,075
Bad Debts Expense25,425 
Allowance for Doubtful Accounts 25,425

Correct

Accounts Receivable24,750 
Bad Debts Expense675 
Sales 25,425
Accounts Receivable25,425 
Allowance for Doubtful Accounts 25,425
Explanation
    
Desired balance in allowance account:$24,750credit
Current balance: 675debit
Required: adjustment to allowance$25,425credit

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
 

    
Accounts receivable$365,000debit
Allowance for uncollectible accounts 600debit
Net Sales 810,000credit


All sales are made on credit. Based on past experience, the company estimates that 0.4% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? 

$3,240 – Correct

$3,840

$860

$2,640

$2,060

Explanation

$810,000 × 0.004 = $3,240


A company has $106,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 5% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $960 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

$4,340 – Correct

$5,252

$5,348

$5,300

$6,260

Explanation
     
Desired balance in allowance account:$106,000 × 0.05 =$5,300credit
Current balance in allowance account:  -960credit
Adjustment to allowance: $4,340credit

Jasper makes a $83,000, 90-day, 7% cash loan to Clayborn Co. Jasper’s entry to record the transaction should be:

Debit Notes Receivable for $83,000; credit Cash $83,000. – Correct

Debit Accounts Receivable $83,000; credit Notes Receivable $83,000.

Debit Cash $83,000; credit Notes Receivable for $83,000.

Debit Notes Payable $83,000; credit Accounts Payable $83,000.

Debit Notes Receivable $83,000; credit Sales $83,000.


Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $14,162. Franklin’s August bank statement shows $15,037 on deposit in the bank. Determine the adjusted cash balance using the following information:
 

  
Deposit in transit$4,800
Outstanding checks$4,100
Bank service fees, not yet recorded by company$60
The bank collected on a note receivable, not yet recorded by the company$1,635


The adjusted cash balance should be:

$19,837

 $10,937.

$15,797

$14,102

$15,737 – Correct

Explanation
    
Bank balance$15,037Book balance$14,162
+ Deposit in transit 4,800Bank service fees -60
– Outstanding checks -4,100Note collected 1,635
Adjusted bank balance$15,737Adjusted book balance$15,737

The interest accrued on $3,600 at 7% for 30 days is: (Use 360 days a year.)

$126.

$25.

$294.

$21. Correct

$29.

Explanation

$3,600 × 0.07 × 30/360 = $21


Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $4,100 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

Accounts Receivable—A. Hopkins4,100 
Allowance for Doubtful Accounts 4,100
Allowance for Doubtful Accounts4,100 
Bad debts expense 4,100
Accounts Receivable—A. Hopkins4,100 
Bad debts expense 4,100
Cash4,100 
Accounts Receivable—A. Hopkins 4,100
Allowance for Doubtful Accounts4,100 
Accounts Receivable—A. Hopkins 4,100

Correct

Cash4,100 
Accounts Receivable—A. Hopkins 4,100

On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $98,500; Allowance for Doubtful Accounts, credit balance of $1,091. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

$2,849. – Correct

$1,091.

$1,957.

$5,031.

$3,940.

Explanation
     
Desired balance in allowance account:$98,500 × 0.04 =$3,940credit
Current balance in allowance account:  −1,091credit
Required: amount of Bad Debts Expense: $2,849credit

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $675. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Bad Debts Expense24,750 
Allowance for Doubtful Accounts 24,750
Bad Debts Expense24,075 
Allowance for Doubtful Accounts 24,075
Bad Debts Expense25,425 
Allowance for Doubtful Accounts 25,425

Correct

Accounts Receivable24,750 
Bad Debts Expense675 
Sales 25,425
Accounts Receivable25,425 
Allowance for Doubtful Accounts 25,425
Explanation
    
Desired balance in allowance account:$24,750credit
Current balance: 675debit
Required: adjustment to allowance$25,425credit

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
 

    
Accounts receivable$365,000debit
Allowance for uncollectible accounts 600debit
Net Sales 810,000credit


All sales are made on credit. Based on past experience, the company estimates that 0.4% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? 

$3,240 – Correct

$3,840

$860

$2,640

$2,060

Explanation

$810,000 × 0.004 = $3,240


A company has $106,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 5% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $960 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

$4,340 – Correct

$5,252

$5,348

$5,300

$6,260

Explanation
     
Desired balance in allowance account:$106,000 × 0.05 =$5,300credit
Current balance in allowance account:  -960credit
Adjustment to allowance: $4,340credit

Jasper makes a $83,000, 90-day, 7% cash loan to Clayborn Co. Jasper’s entry to record the transaction should be:

Debit Notes Receivable for $83,000; credit Cash $83,000. – Correct

Debit Accounts Receivable $83,000; credit Notes Receivable $83,000.

Debit Cash $83,000; credit Notes Receivable for $83,000.

Debit Notes Payable $83,000; credit Accounts Payable $83,000.

Debit Notes Receivable $83,000; credit Sales $83,000.


Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $14,162. Franklin’s August bank statement shows $15,037 on deposit in the bank. Determine the adjusted cash balance using the following information:
 

  
Deposit in transit$4,800
Outstanding checks$4,100
Bank service fees, not yet recorded by company$60
The bank collected on a note receivable, not yet recorded by the company$1,635


The adjusted cash balance should be:

$19,837

 $10,937.

$15,797

$14,102

$15,737 – Correct

Explanation
    
Bank balance$15,037Book balance$14,162
+ Deposit in transit 4,800Bank service fees -60
– Outstanding checks -4,100Note collected 1,635
Adjusted bank balance$15,737Adjusted book balance$15,737

The interest accrued on $3,600 at 7% for 30 days is: (Use 360 days a year.)

$126.

$25.

$294.

$21. Correct

$29.

Explanation

$3,600 × 0.07 × 30/360 = $21


Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $4,100 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

Accounts Receivable—A. Hopkins4,100 
Allowance for Doubtful Accounts 4,100
Allowance for Doubtful Accounts4,100 
Bad debts expense 4,100
Accounts Receivable—A. Hopkins4,100 
Bad debts expense 4,100
Cash4,100 
Accounts Receivable—A. Hopkins 4,100
Allowance for Doubtful Accounts4,100 
Accounts Receivable—A. Hopkins 4,100

Correct

Cash4,100 
Accounts Receivable—A. Hopkins 4,100

On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $98,500; Allowance for Doubtful Accounts, credit balance of $1,091. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

$2,849. – Correct

$1,091.

$1,957.

$5,031.

$3,940.

Explanation
     
Desired balance in allowance account:$98,500 × 0.04 =$3,940credit
Current balance in allowance account:  −1,091credit
Required: amount of Bad Debts Expense: $2,849credit

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $675. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Bad Debts Expense24,750 
Allowance for Doubtful Accounts 24,750
Bad Debts Expense24,075 
Allowance for Doubtful Accounts 24,075
Bad Debts Expense25,425 
Allowance for Doubtful Accounts 25,425

Correct

Accounts Receivable24,750 
Bad Debts Expense675 
Sales 25,425
Accounts Receivable25,425 
Allowance for Doubtful Accounts 25,425
Explanation
    
Desired balance in allowance account:$24,750credit
Current balance: 675debit
Required: adjustment to allowance$25,425credit

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
 

    
Accounts receivable$365,000debit
Allowance for uncollectible accounts 600debit
Net Sales 810,000credit


All sales are made on credit. Based on past experience, the company estimates that 0.4% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? 

$3,240 – Correct

$3,840

$860

$2,640

$2,060

Explanation

$810,000 × 0.004 = $3,240


A company has $106,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 5% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $960 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

$4,340 – Correct

$5,252

$5,348

$5,300

$6,260

Explanation
     
Desired balance in allowance account:$106,000 × 0.05 =$5,300credit
Current balance in allowance account:  -960credit
Adjustment to allowance: $4,340credit

Jasper makes a $83,000, 90-day, 7% cash loan to Clayborn Co. Jasper’s entry to record the transaction should be:

Debit Notes Receivable for $83,000; credit Cash $83,000. – Correct

Debit Accounts Receivable $83,000; credit Notes Receivable $83,000.

Debit Cash $83,000; credit Notes Receivable for $83,000.

Debit Notes Payable $83,000; credit Accounts Payable $83,000.

Debit Notes Receivable $83,000; credit Sales $83,000.


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