20 D8 E10-5 exerciseFAB Company sells a wide range of merchandise, which are initially purchased on account.Short-term notes are frequently issued to obtain cash.a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system.b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percentinterest accrued at the beginning of each month until paid at maturity in six months.c) On April 1, FAB accrued interest on the $600 note.NAMEd) On September 1, FAB paid the note and accrued interest.REQUIRED:1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts.2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio,and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilitiesand $5000 total assets prior to January 10.Event--FAB Co.Beginning Balanca)buy merchandiseb) receive on notec) accrue interestfor March on Apr 1d) pay notepay interestEnding BALANCEa) buy mdse oncreditSCF Cash Inven-Classtory2500 2500Curnt Debt TimesRatioAsst Interstratio Earnd1000 10001000Comn Ret'd REStock Earn' Clas1000 1000 b) receive on notec) accrue Marchinterestd) pay notepay interest

The current ratio is computed by dividing the current asset by the current liabilities. A change in…

20 D8 E10-5 exercise FAB Company sells a wide range of merchandise, which are initially purchased on account. Short-term notes are frequently issued to obtain cash. a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system. b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percent interest accrued at the beginning of each month until paid at maturity in six months. c) On April 1, FAB accrued interest on the $600 note. d) On September 1, FAB paid the note and accrued interest. REQUIRED: 1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts. NAME 2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio, and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilities and $5000 total assets prior to January 10. Event--FAB Co. Beginning Balanc a)buy merchandise b) receive on note c) accrue interest for March on Apr 1 d) pay note pay interest Ending BALANCE a) buy mdse on credit SCF Cash Inven- Class tory 2500 2500 ➖➖➖➖➖➖ Curnt Debt Times Ratio Asst Interst ratio Earnd 1000 1000 1000 Comn Ret'd RE Stock Earn' Clas 1000 1000 ➖➖➖➖➖

20 D8 E10-5 exercise FAB Company sells a wide range of merchandise, which are initially purchased on account. Short-term notes are frequently issued to obtain cash. a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system. b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percent interest accrued at the beginning of each month until paid at maturity in six months. c) On April 1, FAB accrued interest on the $600 note. d) On September 1, FAB paid the note and accrued interest. REQUIRED: 1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts. NAME 2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio, and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilities and $5000 total assets prior to January 10. Event--FAB Co. Beginning Balanc a)buy merchandise b) receive on note c) accrue interest for March on Apr 1 d) pay note pay interest Ending BALANCE a) buy mdse on credit SCF Cash Inven- Class tory 2500 2500 ➖➖➖➖➖➖ Curnt Debt Times Ratio Asst Interst ratio Earnd 1000 1000 1000 Comn Ret'd RE Stock Earn' Clas 1000 1000 ➖➖➖➖➖

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....

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Year 1 Apr. 20 Purchased $49,750 of merchandise on credit from Nguyen, terms n/30. May 19 Replaced the April 20 account payable to Nguyen with a 90-day, 8%, $38,000 note payable along with paying $11,750 in cash. July 8 Borrowed $102,000 cash from NMR Bank by signing a 120-day, 10%, $102,000 note payable. Aug. 17 Paid the amount due on the note to Nguyen at the maturity date. Nov. 5 Paid the amount due on the note to NMR Bank at the maturity date. Nov. 28 Borrowed $60,000 cash from Chicago Bank by signing a 60-day, 6%, $60,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Year 2 Jan. 27 Paid the amount due on the note to Chicago Bank at the maturity date. 1. Prepare a Calculation of Interest Gonzalez Co. Calculation of interest expense August 17 - Nguyen note: Principal Interest rate Number of days' interest to be recorded…
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%24 ... Check my w [The following information applies to the questions displayed below.] Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $38,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $3,000 in cash. July 8 Borrowed $66,000 cash from NBR Bank by signing a 120-day, 12%, $66,000 note payable. Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $30,000 cash from Fargo Bank by signing a 60-day, 7%, $30,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 Paid the amount due on the note to Fargo Bank at the maturity date. 4. Determine the interest expense recorded in Year 2. (Do not round intermediate calculations and round your final answers to nearest whole…
12. Silver Co. sold merchandise to Bronze Co. on account, P23,000, terms 2/15, net 45. The cost of the merchandise sold is P18,500. Silver Co. issued a credit memorandum for P2,500 for merchandise returned that originally cost P1,900. The Bronze Co. paid the invoice within the discount period. What is amount of net sales from the above transactions? P20,090 b. P20,500 a. C. P3,490 d. P23,000
36.Willy Company sold on credit merchandise having a list price of P200,000 with the following terms: trade discount of 10% and 5%; cash discount of 3% if the account is paid within 10 days from the invoice date; full amount is due in 30 days. If Willy Company uses the gross price method, what are the accounts and amounts debited upon collection within the discount period? a. Cash, 194,000; Sales Discounts, 6,000 b. Cash 165,870 c. Cash, 165,870; Sales Discounts, 5,130 d. Cash, 171,000; Sales Discounts Forfeited, 5,130
Brown Distributors has the following transactions related to notes receivable during the last two months of the year. Dec. 1 Loaned $18,000 cash to K. Perry on a 1-year, 5% note. 16 Sold goods to L. Bryan, receiving a $4,800, 60-day, 7% note. 31 Accrued interest revenue on all notes receivable. D Journalize the transactions for Brown Distributors. Omit cost of goods sold entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
13 On November 1, Orpheum Company accepted a $10,000, 90-day, 8% note from a customer to replace an account receivable. What entry should be made by Orpheum on the November 1 to record the acceptance of the note? Mc Grew Multiple Choice Debit Notes Receivable $10,000 credit Cash $10,000 Debe Notes Receivable $10,000; credit Accounts Receivable $10,000 Dit Notes Receivable $10,000 credit Sales $10,000 Debit Notes Re-evable 310,200, crede Accounts Receivable $10.000: credit interest Revenue $200 Debit Sales $10.000 chade Accounts Receivable $10.000
9. Company S purchased 1,000 units raw materials amounting to $5,000 and used $4,500 worth for the production during the current month. The standard price for these raw materials is $5.2 per unit. How much is the materials price variance for the current month if Company S analyzes the variance at the point of purchase? O $200 favorable O $200 unfavorable O $700 favorable O $700 unfavorable 10. T Corporation is authorized to issue 500,000 common stock at $10 par value. As of December 31, 2019 the corporation has 350,000 common stock issued and outstanding. On February 14, 2020, the market price of the stock is $17. On the same date, T Corporation acquired 50,000 stocks at $15. On March 5, 2020, the company reissued 25% of the treasury stocks at $20. Which of the following will be included in the entry to record the transaction on March 5, 2020? Debit Treasury Shares $187,500 Debit Common Stock $250,000 O Credit Additional Paid-in Capital $62,500 O Credit Cash $250,000
7. Assuming a 365-day year, how long (in average days) does the collectibles from customers stay as outstanding accounts receivable if Company Z has a total sale of $1,800,000 of which $200,000 are cash sales and the beginning and ending accounts receivable balances are $30,000 and $50,000, respectively. 11.40 days O 9.13 days 6.84 days 8.11 days
24. Baker Company sells merchandise on account for $5,000 to Helix Company with credit terms of 1/10, n/30. Helix Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Baker Company make upon receipt of the check? a. Cash... Accounts Receivable. b. Cash...... Sales Returns and Allowances. Accounts Receivable. c. Cash...... Sales Returns and Allowances. Sales Discounts. Accounts Receivable. d. Cash...... Sales Discounts.. Sales Returns and Allowances. Accounts Receivable.... 4,400 4,356 644 4,356 600 44 4,950 50 4,400 5,000 5,000 600 4,400
The company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $10 in Allowance for Sales Discounts as of December 31. Of the $25,000 of receivables, $10,000 are within a 2% discount period that the company expects the buyers to take. Note: Enter debits before credits. Date 12/31 General Journal Debit Credit
Merchandise subject to the credit terms 2/10, n/30, FOB shipping point, is sold to a customer on account for $20,125. The seller issued a credit memorandum for $4,600 prior to payment. What is the amount of the cash discount allowable if the payment is made within 10 days of the invoice date?