Question
1. The following information was taken from Metlock Electrical Service Company cash budget for the month of July: Beginning cash balance $130000 Cash receipts 125000
1. The following information was taken from Metlock Electrical Service Company cash budget for the month of July:
Beginning cash balance | $130000 | |
Cash receipts | 125000 | |
Cash disbursements | 177000 |
If the company has a policy of maintaining an end of the month cash balance of $130000, the amount the company would have to borrow is
$37440.
$78000.
$26000.
$52000.
2. The following credit sales are budgeted by Marin Discount Retail Company:
January | $238700 | |
February | 351000 | |
March | 491400 | |
April | 421200 |
The companys past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is
$421200.
$412780.
$393120.
$433276.
3. Shamrock Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $150000 and credit sales are $1510000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Shamrock Company make if the Allowance for Doubtful Accounts has a credit balance of $1500 before adjustment?
Bad Debt Expense | 6000 |
| |
| Accounts Receivable |
| 6000 |
Bad Debt Expense | 4500 |
| |
| Allowance for Doubtful Accounts |
| 4500 |
Bad Debt Expense | 4500 |
| |
| Accounts Receivable |
| 4500 |
Bad Debt Expense | 6000 |
| |
| Allowance for Doubtful Accounts |
| 6000 |
4. Cullumber Marine Corporations unadjusted trial balance includes the following balances (assume normal balances):
Accounts receivable | $1890000 | |
Allowance for doubtful accounts | $45000 |
Uncollectibles are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?
$68400
$66270
$106030
$111400
5. The financial statements of the Carla Vista Manufacturing Supply Company report net credit sales of $372000 and net accounts receivable of $50400 and $18000 at the beginning of the year and the end of the year, respectively. What is the average collection period for accounts receivable in days? (Use 365 days for calculation.)
23.4
43.7
33.6
74.1
6. Shamrock Salon Supply Corporation had net credit sales during the year of $1047750 and cost of goods sold of $484000. The net accounts receivable at the beginning of the year was $110400 and at the end of the year was $143600. What was the accounts receivable turnover?
7.0
8.3
10.3
5.1
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