ACC 101_Review Activity

Refer to the image.

• 44,760

• 30,560

• 29,708

• 45,612

During 2008, Carbondale Inc. had sales on account of $132,000, cash sales of $54,000, and collections on account of $84,000. In addition, they collected $1,450 which had been written off as uncollectible in 2007. As a result of these transactions, the change in the accounts receivable balance indicates a​ ​ (a)  

• $48,000 increase
• $100,550 increase.
• $46,550 increase.
• $102,000 increase

In 2008, Carpenter Company had net credit sales of 1,125,000. On January 1, 2008, Allowance for Doubtful Accounts had a credit balance of $27,000. During 2008, $45,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $300,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2008?

• $30,000

• $112,500

• $48,000

• $45,000

A company has net credit sales of $900,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If Allowance for Doubtful Accounts has a credit balance of $1,000 prior to adjustment, its balance after adjustment will be a credit of ​ ​ (a)  

• $19,000.
• $18,000.
• $17,000.
• $17,980.

In reviewing the accounts receivable, the net realizable value is $16,000 before the write-off of a $1,500 account. What is the net realizable value after the write-off?

• $16,000

• $1,500

• $17,500

• $17,500

Present value is

• the value now of a future amount.

• the amount that must be invested now to produce a known future value.

• always smaller than the future value.

• all of these.

ABC Co. received the following notes receivable on January 1, 2021:

9-month, 10% note from Alpha Company 5,000

6-month, noninterest bearing note from Beta Inc. 10,000

14%, 3-year note from Charlie Corp. 20,000

Market rate of interest 10%

PV of 1 at 10% 0.75

At what amount will the notes be initially recognized?

• 35,000

• 30,000

• 28,750

• 33,750

What is the total interest revenue earned by Jean Company over the life of this note?

• 504,500

• 556,000

• 800,000

• 900,00

What amount should be recognized as interest revenue for the current year?

• 176,365

• 160,000

• 111,200

• 180,000

On January 1, 2018, Mill Company sold a building and received as consideration P1,000,000 cash and a P4,000,000 non-interest-bearing note due on January 1, 2021. There was no established exchange price for the building and the note had no ready market. The prevailing rate of interest for a note of this type was 10%. The PV of 1 at 10% for three periods is 0.75. What amount of interest revenue should be included in the 2019 income statement?

• 370,000

• 400,000

• 300,000

• 330,000