1. Which of the following statements regarding cash purchases discounts from suppliers is/are correct? (1) they are reductions in retail prices by manufacturer (2) they are revenues of the entity (3) the cash account is debited when they are received by the entity A. 2 only B. 3 only C. 1 and 2 only D. 1 and 3 only 2. ABC Company bought merchandise from Runnex 36,500 terms 3/10, n/6p. What js the journal entry assuming it was paid within the discount period? 3. What will be the entry when the company cash purchases amounting 13,440? 4. Strange company purchases merchandise from Collius Co. 95,000 terms 2/10, n/60 eith trade discounts of 5%. What is the entry of the transaction?

1. Which of the following statements regarding cash purchases discounts from suppliers is/are correct? (1) they are reductions in retail prices by manufacturer (2) they are revenues of the entity (3) the cash account is debited when they are received by the entity A. 2 only B. 3 only C. 1 and 2 only D. 1 and 3 only 2. ABC Company bought merchandise from Runnex 36,500 terms 3/10, n/6p. What js the journal entry assuming it was paid within the discount period? 3. What will be the entry when the company cash purchases amounting 13,440? 4. Strange company purchases merchandise from Collius Co. 95,000 terms 2/10, n/60 eith trade discounts of 5%. What is the entry of the transaction?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 78E

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Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400
Which of the following statements is true? a. Net cash flow from operating activities must be determined using the indirect method. b. The indirect method adjusts sales for changes in noncash items to produce net cash flow from operating activities. c. Many companies prefer the indirect method because it is easier and less costly to prepare. d. The FASB prefers the indirect method.
Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following transactions: a. Made credit sales of $825,000. The cost of the merchandise sold was $560,000. b. Collected accounts receivable in the amount of $752,600. c. Purchased goods on credit in the amount of $574,300. d. Paid accounts payable in the amount of $536,200. Required: Prepare the journal entries necessary to record the transactions. Indicate whether each transaction increased cash, decreased cash, or had no effect on cash.
Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. sold goods to customers on credit B. collected cash from customer accounts C. sold goods to customers for cash D. collected cash in advance for goods to be delivered later
MCQS 1 AS Inc. made a €40,000 sale on account with the following terms: 2/15, n/30. If the company uses the net method to record sales made on credit, how much should be recorded as sales revenue?a. € 38,400b. € 40,800c. €40,000d. €39,200MCQ 2Which of the following is not considered cash for financial reporting purposes?a. Petty cash funds and change fundsb. Dividends receivablec. Coin, currency, and available fundsd. Money orders, certified checks, and personal checksMCQ 3Travel advances should be reported asa. supplies.b. cash because they represent the equivalent of money.c. investments.d. None of these answer choices are correct. no need of explanation
Your answer is partially correct. Try again. Presented below is information related to Buffalo Corp., which sells merchandise with terms 2/10, net/60. Buffalo Corp. records its sales and receivables net. July 1 Buffalo Corp. sold to Warren Harding Co. merchandise having a sales price of $16,000. 5 Accounts receivable of $12,600 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 8%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) 9 Specific accounts receivable of $12,600 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,900 at a finance charge of 7% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Dec. 29 Warren Harding Co. notifies Buffalo that it is bankrupt and will pay only 10% of its account. Give the entry to write…
1. Which of the following is not a difference between a retail business and a service business? a.the inclusion of gross profit on the income statement b.elements of the accounting equation c.what is sold by the business d.the inclusion of merchandise inventory on the balance sheet 2. The following procedures were recently implemented at Health Station, Inc. For each procedure, indicate whether the internal control over cash represents (1) a strength or (2) a weakness. a. All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares a listing of the cash receipts and forwards a copy of the list to the accounts receivable clerk for recording in the accounts. This is a weakness. b. The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer’s office for approval. This is a strength. c. At the end of each day, all cash receipts are placed…
Delta Company sold goods to wholesalers on terms 2/15, n/30. The entity had no cash sales but 50% of the customers took advantage of the discount. The entity used the gross method of recording sales and accounts receivable. An analysis of the trade accounts receivable at year-end revealed the following: Age (No. of Days) Amount Collectible 0-15 2,000,000 100% 16-30 1,400,000 95% 31-60 400,000 90% Over 60 200,000 50% What is the net realizable value of accounts receivable at year-end?
Assume that the percentage of sales method was used instead by the company and that on December 31st, 2010 5% of 2010 ‘s credit sales are estimated to be uncollectible. Assume Sales for 2010 were 520,000 (60% relates to cash sales) required : Determine the amount to be charged to the uncollectible expense account. (1) Prepare the Allowance for uncollectible account for 2010, using this method (ii) Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 2010
Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 617,500 Cost of goods sold 292,000 Gross profit 325,500 Operating expenses (excluding depreciation) $ 139,400 Depreciation expense 27,750 167,150 Other gains (losses) Loss on sale of equipment (12,125) Income before taxes 146,225 Income taxes expense 34,050 Net income $ 112,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year…
If purchases were made under terms of (a) trade discount of 20%, (b) credit terms of 2/10, n/30, and (c) shipping terms of FOB shipping point, freight collect, which of the following sentences are FALSE? a. The entity will pay for its freight-in on the purchase. b. The invoice price is only 80% of the list price. c. If the entity uses the perpetual inventory method, shipping cost would be recorded as a debit to Freight-in and a credit to cash. d. If the entity paid on the tenth day, it would only pay 98% of the invoice price.
Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…