Exam 6: Cash, Receivables, and the Time Value of Money

St.John's Inc.reported accounts receivable on January 1, 2013, of $500,000 and on December 31, 2013, of $550,000.Sales for the year were $4,000,000.What is their accounts receivable turnover ratio for the year?

Which of the following is included in the current ratio but not the quick ratio?

Which of the following is not a required condition for using the present value annuity formula?

Carlos wants to invest enough money now to have $25,000 in three years to buy a new car.If interest rates are 4%, the amount he needs to invest now is closest to:

Gros-Morne Inc.has the following assets and liabilities on their balance sheet: Cash and temporary investments \ 25,000 Accounts receivable 125,000 Inventory 225,000 Capital assets (net) 462,500 Accounts payable 115,000 Other payables 138,000 Bonds payable 100,000 What is their quick ratio?

Which of the following is the correct formula for calculating the present value of an amount invested (A) at an interest rate of r, for n periods?

Sarah invested $15,000 three years ago at 4%.Today the total amount would be closest to:

Hopewell's accounts receivable turnover ratio is 6.5, and their credit terms are 60 days.Which of the following statements is true?

Ines Corporation bought a new machine and agreed to pay for it in equal annual instalments of $10,000 at the end of each of the next four years.The payments include both interest and principal.The rate of interest for this transaction is 8%.The total amount of interest that Ines will pay is closest to?

Which of the following would be an effective internal control procedure over cash?

Your friend has invited you to participate in his latest business venture.You expect to receive $10,000 a year for the next 10 years, starting one year from now.If interest rates are 7% the amount you would be willing to invest would be closest to?

Which of the following is an account that could contain hidden reserves?

Ines Corporation bought a new machine and agreed to pay for it in equal annual instalments of $10,000 at the end of each of the next four years.The payments include both interest and principal.The rate of interest for this transaction is 8%.The amount that Ines should record the cost of the machine at is closest to?

How does a company determine the net realizable value of accounts receivable?

Your rich uncle wants to set up a fund that allows you to withdraw $12,000 per year for the four years you are at university.The first payment will be made the day you start, followed by three other payments starting one year from then.If interest rates are 4%, the amount your uncle needs to have on hand the day before the first payment is closest to?

Teed's Contracting Company bought a new excavator on January 1, 2013.The company paid $10,000 down and signed a note receivable for the balance.The note required four annual cash payments of $18,000; the market interest rate is 8 percent Required: A) At what amount will the equipment be recorded on the balance sheet for 2013? B) How much was the interest expense for 2013? C) What is the total amount of interest Teed's will pay on the machine?

Worley Limited uses the allowance method to account for bad debts.In 2013, a customer owing $650 of goods purchased on credit went bankrupt.The full amount of the receivable was considered uncollectible.What entry should be made to reflect this information?

What is the process that management implements to ensure the safety of assets, the reliability of its financial reporting and compliance with relevant laws called?

Gros-Morne Inc.has the following assets and liabilities on their balance sheet: Cash and temporary investments \ 25,000 Accounts receivable 125,000 Inventory 225,000 Capital assets (net) 462,500 Accounts payable 115,000 Other payables 138,000 Bonds payable 100,000 What is their current ratio?

Ralston Hardware reported the following items for 2014: Accounts receivable balance, January 1, 2014 \ 125,000 Allowance for doubtful accounts balance, January 1, 2014 3,000. Total credit sales during 2014 653,000 Total collections on accounts receivable during 2014 567,000 Experience indicates that 3% of the outstanding accounts receivable at the end of each year ultimately will be uncollectible.What should be the December 31, 2014, bad debt expense using the percentage- of-receivables method?