13)

Becky Corp. had net sales (all on account) in 2019 of $1,800,000. At December 31, 2019, before adjusting entries, the balances in selected accounts were: accounts receivable $750,000 debit, and allowance for doubtful accounts $1,500 debit. Becky Corp. estimates that 1% of its net sales will prove to be uncollectible. What is the net realizable value of the receivables reported on the financial statements at December 31, 2019?

Group of answer choices

$733,500

$732,000

$133,500

$730,500

Question 15 Venus Inc assigns $3,000,000 of its accounts receivables as collateral for a $2 million loan with a bank. The bank assesses a 2% finance charge on the collateral amount and charges interest on the note at 6%. What would be the journal entry to record this transaction?

Group of answer choices

Debit Cash for $1,940,000, debit Interest Expense for $60,000, debit Due from Bank for $1,000,000, and credit Accounts Receivable for $3,000,000.

Debit Cash for $1,940,000, debit Interest Expense for $60,000, and credit Accounts Receivable for $2,000,000.

Debit Cash for $1,940,000, debit Interest Expense for $60,000, and credit Notes payable for $2,000,000.

Debit Cash for $1,820,000, debit Interest Expense for $180,000, and credit Notes Payable for $2,000,000.

16) The various classifications listed below have been used in the past by Hale Company on its balance sheet.

a	Current assets	e	Current liabilities
b	Investments	f	Long-term liabilities
c	Property & Equipment	(f)	Long-term liabilities, contra
(c)	Property & Equipment, contra	g	Common stock and paid-in capital
d	Intangible assets	h	Retained earnings
(d)	Intangible assets, contra	i	Other stockholders' equity accounts
		x	not reported on Bal. Sheet

Instructions

Indicate by letter how each of the items below should be classified at December 31, 2019.

• If an item is not reported on the December 31, 2019 balance sheet, use the letter "X" for your answer.
• If the item is a contra account within the particular classification, select the account name with parentheses around the letter & contra account indicator

A letter may be used more than once or not at all.

Amortization of patents for 2019

On December 31, 2019, Hale signed a purchase commitment to buy all of its raw materials from Delta Company for the next 2 years.

Discount on bonds payable due March 31, 2025 (Hale is the borrower).

Cash dividends declared on December 15, 2019 payable to stockholders on January 15, 2020.

A cash account with a credit balance due to having become overdrawn at the bank.

Equity securities recorded under the cost method.

Accumulated depreciationequipment.

Treasury stock.

Current maturities on a building mortgage payable.

An autonomous driving technology was patented in December 2019.

(17)

Calculate the market value at the date of issuance of an investment in a $700,000, ten-year, 8% bond issuance, paying interest annually, which is sold to yield an effective rate of 10%.

18)

Smartway Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capacity, the only difference is the price. Location A may be purchased for $610,000. Location B may be acquired with a down payment of $100,000 and annual payments at the end of each of the next twenty years of $50,000. Location C requires $60,000 payments at the beginning of each of the next fifteen years. Assuming Smartway's borrowing costs are 8% per annum (annually), calculate the value of each option so that Smartway can determine which location is the least costly.

Location A ? Location B ? Location C?

19)

A trial balance before adjustment included the following:

	Debit		Credit
Accounts receivable	$120,000
Allowance for doubtful accounts			$820
Sales			530,000
Sales returns & allowances	9,000

Prepare journal entries assuming that the estimate of uncollectibles is determined by taking (1) 5% of gross accounts receivable; and (2) 1% of net sales. (2 separate scenarios)

20)

Steinbeck Company lent $82,645 to Hemingway, Inc, accepting Hemingway's 2-year, $100,000, zero-interest-bearing note. The implied interest rate is 10%. Prepare Steinbeck's journal entries for

(a) the initial transaction,

(b) recognition of interest each year, and

(c) the collection of $100,000 at maturity

21)

Selected financial statement information and additional data for Stanzla Co. is presented below. Prepare a properly formatted statement of cash flows for the year ending December 31, 2019 in Excel, Word or the format of your choosing and upload the file when completed.

	2019	2018	Change
Cash	$65,000	$42,000	$23,000
Accounts receivable, net	144,200	90,000	54,200
Inventory	206,600	162,000	44,600
Land	21,000	78,800	(57,800)
Equipment	789,600	504,000	285,600
Total	$1,226,400	$876,800
Accumulated depreciation	$115,600	$84,000	31,600
Accounts payable	86,000	50,400	35,600
Notes payable - short term	29,400	67,200	(37,800)
Notes payable - long term	302,400	168,000	134,400
Common stock	487,200	420,000	67,200
Retained earnings	205,800	87,200	118,600
Total	$1,226,400	$876,800

Additional data for 2019:

1. Net income was $220,200.
2. Depreciation was $31,600.
3. Land was sold at its original cost.
4. Dividends of $81,600 were paid.
5. Equipment was purchased for $84,000 cash.
6. A long-term note for $201,600 was used to pay for an equipment purchase.
7. Common stock was issued to settle (pay off) a $67,200 long-term note payable.