2004 Fall Accounting_011_exam_2___Fall_2004_Answers

2004 Fall Accounting_011_exam_2___Fall_2004_Answers - Name...

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Name ________________________________ Temple University Fox School of Business and Management Dr. Steven Balsam Accounting 011 Exam #2 October 20, 2004 ANSWERS Instructions: You have 100 minutes. Answer the questions on the pages provided and please remember to show all work so that you may receive partial credit. Also please put your name on each page in case the pages get separated. Good luck!
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Multiple Choice (3 points each – 48 points total – please include answers on answer sheet). 1. Before year-end adjusting entries, Bass Company's account balances at December 31, 2004, for accounts receivable and the related allowance for uncollectible accounts were $700,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is a. $682,500. b. $637,500 . c. $592,500. d. $655,000. After the adjusting entry the balance of accounts receivable is still $700,000 while the balance in the allowance is $62,500. 700,000-62,500=637,500 2. During the year, Jantz Company made an entry to write off a $4,000 uncollectible account. Before this entry was made, the balance in accounts receivable was $80,000 and the balance in the allowance account was $4,500. The net realizable value of accounts receivable after the write-off entry was a. $80,000. b. $79,500. c. $71,500. d. $75,500. After the writeoff the balance in accounts receivable is $76,000 and the balance in the allowance is 500. 76,000-500=75,500 3. The following accounts were abstracted from Vann Co.'s unadjusted trial balance at December 31, 2004: Debit Credit Accounts receivable $700,000 Allowance for uncollectible accounts 8,000 Net credit sales $3,000,000 Vann estimates that 2% of the gross accounts receivable will become uncollectible. After adjustment at December 31, 2004, the allowance for uncollectible accounts should have a credit balance of a. $60,000. b. $44,000. c. $30,000. d. $14,000 . 700,000*.02=14,000
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4. _ When should the loss on an uncollectible account receivable be recorded as an expense for accrual accounting purposes? a. When it is determined that an account cannot be collected. b. In the same period in which the sale on account occurs . c. When the balance is past due for more than 3 months. d. When a lawyer indicates that collection efforts would cost more than the account is worth. 5. _ Oswald Company's account balances at December 31 for Accounts Receivable and the related Allowance for Doubtful Accounts are $750,000 and $20,000, respectively. From an analysis of accounts receivable, it is estimated that $42,000 of the December 31 receivables will be uncollectible. After adjustment for the above facts, the net realizable value of accounts receivable would be a. $750,000. b.
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This note was uploaded on 05/19/2008 for the course ACCT 3511 taught by Professor Balsam during the Spring '07 term at Temple.

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2004 Fall Accounting_011_exam_2___Fall_2004_Answers - Name...

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