On its recent financial statements, Variety Technology reported the following information about net sales revenue and accounts receivable: Current Year Prior Year $ 14,018 $10,887 Accounts receivable, net of allowances of $244 and $199 Net sales revenue 62,170 52,872 According to its Form 10-K, Variety Technology recorded bad debt expense of $113 and there were no bad debt recoveries during the current year. What amount of bad debts was written off during the current year? Number of Years - Question 2 On its recent financial statements, Variety Technology reported the following information about net sales revenue and accounts receivable: Current Year Prior Year $ 14,418 $11,287 Accounts receivable, net of allowances of $284 and $ 239 Net sales revenue 63,170 53,872 According to its current year annual financial statements, Variety Technology recorded bad debt expense of $121 and there were no bad debt recoveries during the current year. All of Variety Technology's sales during the year were on open account. The current year annual financial statements also show that there were $413 goods returned over the year. Assume that all goods were returned before the customers paid. There is no sales discount or credit card discount How much is cash collected from customers over the current year? Numeric Response - Question 3 Rotvil Company is using periodic inventory system. At the end of the year, it did a physical inventory count amounted to $66,100. One of the items sold by Rotvil has such a low volume that management planned to drop it last year. To induce Rotvil to continue carrying the item, the supplier provided the item on a "consignment basis." This means that the supplier retains ownership of the item, and Rotvil has no responsibility to pay for the items until they are sold to a customer. Each month, Rotvil sends a report to the manufacturer on the number sold and remits cash for the cost. At the end of December of the current year, Rotvil had seven of these items on hand; therefore, they were also included in the physical inventory count at $800 each. Then the company computed the ending inventory by doing the following adjustments. Rotvil reports inventory only for goods it owns. Which of the following adjustments would cause ending inventory to be wrong for the company? a) Goods on the consignment basis, amounted to $5,600, are subtracted from the physical count to obtain the ending inventory (i.e., 66,100 - $5,600). b) The purchased goods in transit amounted to $1,300, with terms FOB destination, are added to the physical inventory count to obtain the ending inventory (i.e., 66,100 + $1,300). c) Goods in transit to customers amounted to $4,500, with terms FOB destination, are added to the physical count to obtain the ending inventory (i.e., 66,100 + $4,500). d) $2,100 of purchased goods that have arrived but not yet paid in full are not subtracted from the physical inventory count to obtain the ending inventory. 4 A company has two types of goods in the inventory. The following shows the inventory information in 2019: Inventory A Inventory B Units Unit cost Units Unit Cost Beginning inventory 300 $17 216 $28 Purchase, January 3 240 $26 288 $21 The company uses average costing method. All goods were purchased by cash. Goods A were sold to T. Thomas for $35 per unit, and goods B were sold to B. Brown for $30 per unit. Credit term was 2/10,n/60. The following shows the accounts receivable information (all in 2019) T Thomas Balance $8,400 Date February 5 February 10 December 1 Sale Collection $8,400 $8,400 $3,500 B.Brown Sale Collection $9,120 $3,500 Date Balance $9,120 June The company also has an intangible asset at the end of 2019 follows: Computer software and website development technology purchased on January 1, 2017, for $83,000. The technology is expected to have a five- year useful life to the company with no residual value. 4. A The fiscal year ends at December 31. At the end of the year, the company determined adjustments using the following information: 1. The net realizable value (NRV) of goods A is $4,500 and that of goods B is $4,300. These are total values, not the value per unit. 2. The company uses aging method with the following aging categories and bad debt rates: (a) not yet due, 0%, (b) past due, 5%. The allowance for doubtful account has a debit balance of $20 before bad debt adjustments at the end of 2019. Total accounts receivable at the end of year is $12,620 3. The technology is depreciated using the straightline method. The estimated future cash flows of the technology is $31,200 and fair value is $30,740 Which of the following is true? A) The end-of-year adjustments for bad debt expense, inventory write down, and asset impairment reduces pretax income by $2,976. B) Operating cash flows for 2019 is reported as a negative number: ($4,056). C) The total amount of accounts receivable written off in 2019 must be $20. The write off amount cannot be any other number. D) If the technology was sold for $30,740 on January 1, 2020, there would be a loss on disposal of assets amounted to $2,460. E) There is an impairment loss of the intangible asset amounted to $2,000. 5 Which of the following is most likely to increase the difference between net income and cash flows? "Difference" = absolute value of (net income - cash flows) Increase the difference means making the difference larger. A. When paying the transfer costs of a building, expense the expenditure (i.e., debit expense). (compared to capitalizing the expenditure (i.e., debit asset) 2 B. Offering deeper trade discounts for customers who purchase by cash. (compared to no trade discount) C. Reducing the estimated residual value of a building (within its useful life). (compared to no change in estimated residual value) D. Increasing the net realizable value of inventory to avoid write-down. (compared to no change in net realizable value, which leads to inventory write-down) 6 A company has three used machines that were bought at the beginning of 2019. At the purchase, the machines immediately were overhauled, installed, and started operating. The machines were different, so the company keeps track of their depreciation separately. Nevertheless, the company uses the same account, 'equipment," to record these machines in the accounting system. The data of the machines are as follows: Machine A Machine B Machine C Invoice price paid for $ 26,500 $ 59,900 $ 19,900 asset Installation costs 2,400 2,900 1,100 Renovation costs prior to 2,900 1,400 2,400 use Life 7 years 69,000 hours 9 years Residual value 1,000 2,100 3,000 Double- Depreciation Method Straight- Units-of- line declining- production balance By the end of the first year, each machine had been operating 5,400 hours. The company also has three intangible assets at the end of 2019 as follows, all of which are depreciated using the straight-line method and are recorded using the "intangible asset" account: Computer software and website development technology purchased on January 1, 2017, for $84,000. The technology is expected to have a five- year useful life to the company with no residual value. A patent purchased from lan Zimmer on January 1, 2019, for a cash cost of $24,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life. Patents have a 20 year legal life. A trademark purchased for $20,000 on November 1, 2019. Management decided the trademark has an indefinite life. Which of the following statements is false? A. The depreciation expense of machine C for the year of 2019 is $5,200. B. Net intangible assets reported on the balance sheet is $109,600. C. Total cost of the equipment (all machines) is $119,400. D. Amortization expense reported on the income statement for the year of 2019 is $18,400.Incorrect E. Net equipment reported on the balance sheet is $104,940. The following note was contained in a recent Visions Motor Company annual report: 7 NOTE 8. INVENTORIES-AUTOMOTIVE SECTOR Inventories at December 31 were as follows Current Previous Year Year Raw material, work in process, & $ 3,116 $ 4,420 supplies Finished products 6,683 6,911 Total inventories at FIFO 9,799 11,331 Less LIFO Adjustment (1,251) (1,471) Total $ 8,548 $ 9,860 The company reported inventory using LIFO on its balance sheet. The cost of goods sold reported on the income statement for the current year was $127,169 million. Note that the difference in ending inventory between FIFO and LIFO is decreasing. How much is the cost of goods sold that would have been reported for the current year if Visions had used only FIFO for both years? Numeric Response