Accounts receivable, net of $5,000 allowance
for doubtful accounts
Marketable securities, at fair value, cost of
The following applies to the month ended January 31, 2005 (XYZ uses perpetual inventory
inventory purchases for the month of $500,000, on credit, terms 2/10 net
30, XYZ uses the net method
Sell goods to customers for $1,200,000 (no discounts offered).
system indicates that the cost of the goods sold was $800,000.
Combined collections from customers of $1,100,000 of accounts receivable during
Paid cash of $400,000 against open invoices; some of the invoices were paid after the
discount period, resulting in $5,000 of discounts lost.
Compensation to employees who work directly on manufacturing was paid in the
amount of 10,000.
Management and the administrative staff were paid $25,000.
Management uses 2.0% of sales to provide the accounts receivable allowance.