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Exam 7: Cash and Receivables

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Question 61

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Briefly explain the accounting treatment for estimated sales returns at the end of an accounting period for which cash has already been collected from customers.

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If sales returns are material,...

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Question 62

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In deciding whether financing with receivables is a secured borrowing or a sale under IFRS,the critical element is the extent to which:

A) The transferee has received substantially all the risks and rewards of ownership.
B) The age of the receivables transferred differs from the average age of the receivables.
C) The transferor of the receivable surrenders control over the assets transferred.
D) The transferee relies on funds from the transferor to maintain operations.

E) A) and C)
F) All of the above

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Question 63

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Nontrade receivables do not include:

A summary of Klugman Company's December 31,2016,accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group: The allowance for uncollectible accounts had a balance of $1,400 on January 1,2016.During the year,bad debts of $750 were written off. Required: Prepare all journal entries for 2016 with respect to bad debts and the allowance for uncollectible accounts.

Huckabee's 2016 receivables turnover (rounded) is:

San Mateo Company had the following account balances at December 31,2016,before recording bad debt expense for the year: San Mateo is considering the following approaches for estimating bad debts for 2016:  Based on 3% of credit sales  Based on 6% of year-end accounts receivable What amount should San Mateo charge to bad debt expense at the end of 2016 under each method?

What is the correct entry to record the note

Use the following to answer questions The following information is taken from the 2013 annual report to shareholders of Hewlett-Packard (HP)Co. -For each posted entry in the allowance account during 2013,prepare the journal entry.

Brockton Carpet Cleaning prepares a bank reconciliation at the end of every month.At the end of July,the balance in the general ledger checking account was $2,750 and the bank balance on the bank statement was $2,980.Outstanding checks totaled $680 and deposits in transited were $400.The bank statement revealed that a check written for $120 was incorrectly recorded by Brockton as a $220 disbursement.The bank statement listed service charges and NSF check charges totaling $150.The corrected cash balance is:

What entry would Cherokee make on November 10?

Cash may not include:

What entry would Harvey's make on April 12?

Use the following to answer questions The following information is taken from the 2013 annual report to shareholders of Hewlett-Packard (HP)Co. -Is there any evidence in HP's disclosures above that are consistent with earnings management?

Under IFRS,an overdraft in a cash account at one bank can be offset against a positive balance in the account at another bank for purposes of reporting cash on the company's balance sheet.

Baker Inc.acquired equipment from the manufacturer on 10/1/2016 and gave a noninterest-bearing note in exchange.Baker is obligated to pay $918,000 on 4/1/2017 to satisfy the obligation in full.If Baker accrued interest of $9,000 on the note in its 2016 year-end financial statements,what is its imputed annual interest rate?

Which of the following is true about accounting for a troubled debt restructuring?

If a company adopts an accounts receivable factoring program,and accounts for the factoring as a sale of receivables,which of the following is true in the period the company starts the program (all else equal) ?

Logistics Company had the following items listed in its trial balance at 12/31/2016: Included in the checking account balance is $50,000 of restricted cash that Bank of the East requires as a compensating balance for the $300,000 note.What amount will Logistics include in its year-end balance sheet as cash and cash equivalents?

Describe some key elements of an internal control system for cash.

As of January 1,2016,Farley Co.had a credit balance of $520,000 in its allowance for uncollectible accounts.Based on experience,2% of Farley's credit sales have been uncollectible.During 2016,Farley wrote off $650,000 of accounts receivable.Credit sales for 2016 were $18,000,000.In its December 31,2016,balance sheet,what amount should Farley report as allowance for uncollectible accounts?