In 2004 F. S. Fitzgerald Company had net credit sales of $750,000. On January 1, 2004, Al- lowance for Doubtful Accounts had a credit balance of $18,000. During 2004, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that the al- lowance should be 10% of the balance in re- ceivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $200,000, what is the required adjust- ment to the Allowance for Doubtful Accounts at December 31, 2004?

(a) $20,000.

(b) $75,000.

(c) $32,000.

(d) $30,000. 4. An analysis and aging of the accounts receiv- able of Wells Company at December 31 reveal these data: Accounts receivable

(c) Notes Receivable Sales

(d) Notes Receivable Accounts Receivable 1,000 1,000 1,020 1,020 7. Bright Co. holds Raymond Inc.'s $10,000, 120- day, 9% note. The entry made by Bright Co. when the note is collected, assuming no inter- est has previously been accrued, is: $800,000 9. Allowance for doubtful accounts per books before. adjustment (credit) 50,000 Amounts expected to become uncollectible 65,000

(a) Cash 10,300 Notes Receivable 10,300

(b) Cash 10,000 Notes Receivable

(c) Accounts Receivable Notes Receivable Interest Revenue 10,000 10,300 10,000 300

(d) Cash 10,300 10,000 300 Notes Receivable Interest Revenue 8. Jay Corporation had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in receivables at the beginning of the year was $100,000 and at the end of the year was $150,000. What was the receivables turnover ratio?

(a) 6.4

(b) 8.0

(c) 5.3

(d) 4.0 9. Brendal Corporation sells its goods on terms of 2/10, n/30. It has a receivables turnover ratio of 7. What is its average collec- tion period (days)?

(a) 2,555

(b) 30

(c) 52

(d) 210 What is the cash realizable value of the accounts receivable at December 31, after adjustment?

(a) $685,000.

(b) $750,000.

(c) $800,000.

(d) $735,000.

AppendixLO1