Ch. 7 - EXERCISE 7-3 (1015 minutes) Current assets Accounts...

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EXERCISE 7-3 (10–15 minutes) Current assets Accounts receivable Customers Accounts (of which accounts in the amount of $40,000 have been pledged as security for a bank loan) $79,000 Installment accounts collectible due in 2007 23,000 Installment accounts collectible due after December 31, 2007* 34,000 $136,000 Other** ($2,640 + $1,500) 4,140 $140,140 Investments Advance to subsidiary company 81,000 *This classification assumes that these receivables are collectible within the operating cycle of the business. **These items could be separately classified, if considered material. EXERCISE 7-6 (5–10 minutes) July 1 Accounts Receivable. ................................. 20,000 Sales. .................................................. 20,000 July 10 Cash. ............................................................ ...................................................................... 19,400* Sales Discounts. ......................................... 600
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Accounts Receivable. ....................... 20,000 *$20,000 – (.03 X $20,000) = $19,400 July 17 Accounts Receivable. ................................. 200,000 Sales. .................................................. 200,000
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This note was uploaded on 04/26/2010 for the course ACCT 320 taught by Professor Son during the Spring '10 term at Morgan.

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Ch. 7 - EXERCISE 7-3 (1015 minutes) Current assets Accounts...

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