Question
1. Cullumber Roads sold $224000 of goods and accepted the customer's $224000 12%, 1-year notes receivables in exchange. Assuming 12% approximates the market rate of
1. Cullumber Roads sold $224000 of goods and accepted the customer's $224000 12%, 1-year notes receivables in exchange. Assuming 12% approximates the market rate of return, whta would be the debit in this journal entry to record the sale?
a. Debit Notes Receivable for $197120.
b. Debit Accounts Receivable for $224000.
c. No journal entry until cash is collected.
d. Debit Notes Receivable for $224000.
2. Sheridan Inc. made a $27000 sale on account with the following terms: 1/10n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?
a. Debit Accounts Receivable for $26730.
b. Debit Accounts Receivable for $27000.
c. Debit Accounts Receivable for $26730 and Sales Disccounts for $270.
d. Debit Accounts Receivables for $27000 and Sales Discounts for $270.
3. On the December 31, 2025 balance sheet of Coronado Co., the current receivables consisted of the following:
Trade accounts receivable | $82000 |
Allowance for uncollectible accounts | (3500) |
Claim against shipper for goods lost in transit (November 2025) | 4500 |
Selling price of unsold goods sent by Coronado on consigment at 130% of cost (not included in Coronado's ending inventory) | 42000 |
Security deposit on lease of warehouse used for storing some inventories | 46000 |
Total | $171000 |
At December 31, 2025, the correct total of Coronado's current net receivables was
a. $83000.
b. $171000.
c. $129000.
d. $125000.
4. The following accounts are from Sheridan Co.'s unadjusted trail balance at December 31, 2025:
Debit | Credit | |
Accounts receivable | $728000 | |
Allowance for uncollectible accounts | 7400 | |
Net credit sales | $2880000 |
Sheridan estimates that 5% of the gross accounts receivable will prove to be uncollectible. After adjustment at December 31, 2025, the allowance for uncollectible accounts should have a creit balance of
a. $47500.
b. $36400.
c. $132900.
d. $144000.
5. Marigold Company has the following account balances at year-end:
Accounts Receivable | $152000 |
Allowance for doubtful accounts | 7600 |
Sales discounts | 5200 |
Marigold should report accounts receivable at a net amount of
a. $152000.
b. $139200.
c. $146800.
d. $144400.
6. Sheridan Company has the following items at year-end:
Cash in bank | $42000 |
Petty cash | 440 |
Short-term paper with maturity of 2 months | 7400 |
Postdated checks | 2300 |
Sheridan should report cash and cash equivalents of
a. $52140.
b. $42000.
c. $49840.
d. $42440.
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