Exam 6: The Current Asset Classification, Cash, and Accounts Receivable

Which of the following would be separately reported as restricted cash in the balance sheet or Footnotes to the financial statement?

Use the information that follows from the financial statements of Pines Company at December 31, 2017, to answer questions 16 through 20 that follow. Accounts payable \ 2,000 Accounts receivable 3,000 Capital stock 8,000 Cash 5,000 Inventory 19,000 Land 24,000 Notes payable (short-term) 5,000 Cost of goods sold 12,000 Retained earnings 21,000 Sales revenue 20,000 -Calculate the current ratio for Pines Company at December 31, 2017.

The balances of the allowance for doubtful accounts on the balance sheets dated December 31 of 2017 and 2016 were $21,000 and $14,000, respectively. During 2017, $13,000 of accounts receivable were written off as uncollectible. How much bad debt expense is recognized during 2017?

Before adjusting entries, Kilby Corp's accounts receivable and allowance for doubtful accounts are $745,000 and $7,000 (credit balance), respectively. Using an aging schedule of accounts receivable, it is determined that $60,000 of the accounts receivable would probably be uncollectible. Calculate the net realizable value of Truman's receivables at year end.

Delvin Co. uses the percentage of credit sales approach in estimating its bad debt expense. The total estimate that is calculated by multiplying the percentage times the net sales revenue for the period will be equal to

During the year, Caltech Inc.'s accounts receivable turnover rate increased from 10 to 12 times. The company makes credit sales only. The best explanation for the increase is that

The face amount of accounts receivable for Rio Inc. is $20,000. It was estimated that 5% of the accounts will not be collected, cash discounts of $500 will be exercised, and $200 of sales returns will be experienced. The net realizable value of accounts receivable is

What would the quick ratio be if Ryan sold all of its inventory for $5,000 cash?

Under the allowance method of accounting for bad debts, the recognition of bad debt expense

Brocton Inc. sells to customers only on credit. For the year ended December 31, 2017, the following information is provided: Sales revenue \5 50,000 Accounts receivable, 1/01/17 240,000 Allowance for doubtful accounts, 12/31/17 (before adjustment for bad debts) 600 Collections during 2017 580,000 Accounts written off as uncollectible during 2017 14,000 Sales returns 6,000 A. Determine the balance of the Accounts Receivable account at December 31, 2017. B. If Brocton estimates bad debts at 3% of net credit sales, how much is bad debt expense?

On March 1, 2017, Silver Corp. sold goods to a Chinese company for 10,000 Chinese yuan (10,000 RMB) to be paid on April 1, 2017. The exchange rates on March 1 and April 1, 2017 are US$8.0 = 1 RMB and US$8.5 = 1 RMB, respectively. What is Silver's revenue in US dollars and its 2017 exchange gain or loss?

The allowance for doubtful accounts is

Which of the following are components of the quick ratio?

Management will often choose accounting methods to

The following information was taken from the unadjusted trial balance and aging schedule of Diane Company on December 31, 2017. All sales are on account. Accounts and related balances at December 31, 2017 before adjustment: Debit Credit Accounts receivable \ 46,000 Allowance for doubtful accounts \6 80 Sales (all on account) 500,000 Sales returns 3.000 Aging Schedule of Accounts Receivable: Age Amount \% Uncollectible 0-30 days \ 14,000 5\% 30-60 days 20,000 8\% Over 60 days 12,000 12\% If Diane uses the aging schedule of accounts receivable to determine bad debts, what is the bad debt expense for the year ending December 31, 2017?

Before adjusting entries, Clark's accounts receivable and allowance for doubtful accounts are $42,000 and $300 (credit balance), respectively. Clark determined that 0.4% of net sales would probably be uncollectible. Sales during the year were $500,000 and sales returns amounted to $6,000. Calculate the net realizable value of accounts receivable on Clark's balance sheet at year-end.

The current ratio fails to accurately reflect

The Porsha Bank has provided its auditor with the following selected financial data for 2017: Cash \ 7,000 Loans receivable—current \ 21,000 Allowance for doubtful accounts Total current assets Loans receivable-long-term \ 36,000 Allowance for doubtful accounts Current liabilities 2017 net income In reviewing the loans outstanding, the auditors were troubled by the fact that the collectability of some loans to Brazil was questionable. In fact, Porsha Bank has been making new loans to Brazil so that they can pay the interest on the loans already outstanding. The economic situation of Brazil has forced the auditors to insist that Porsha Bank increase its allowance for its current loans to $9,000 and for its non-current loans to $16,000. Porsha Bank decided to adhere to their auditors' suggestions. Indicate the effects of adopting the auditor's allowance requirements on Porsha Bank's current ratio and 2017 net income.

The net realizable value of receivables is calculated as the face value of the receivables less adjustments for