quiz789WORD - Accounting 350, Fall 2009 Quiz, Chpts 7,8 & 9...

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Accounting 350, Fall 2009 1. Lawrence Company has cash in bank of $15,000, restricted cash in a separate account of $4,000, and a bank overdraft in an account at another bank of $2,000. Lawrence should report cash of A) $13,000. B) $15,000. C) $18,000. D) $19,000. 2. AG Inc. made a $10,000 sale on account with the following terms: 1/15, n/30. If the company uses the net method to record sales made on credit, how much should be recorded as revenue? A) $ 9,800. B) $ 9,900. C) $10,000. D) $10,100. 3. Wellington Corp. has outstanding accounts receivable totaling $2.54 million as of December 31 and sales on credit during the year of $12.8 million. There is also a debit balance of $6,000 in the allowance for doubtful accounts. If the company estimates that 1% of its net credit sales will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense? A) $ 25,400. B) $ 31,400. C) $122,000. D) $134,000. Page 1
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4. The following information is available for Murphy Company: Allowance for doubtful accounts at December 31, 2009 $ 8,000 Credit sales during 2010 400,000 Accounts receivable deemed worthless and written off during 2010 9,000 As a result of a review and aging of accounts receivable in early January 2011, however, it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2010. What amount should Murphy record as "bad debt expense" for the year ended December 31, 2010? A) $4,500 B) $5,500 C) $6,500 D) $13,500 5. Vasguez Corporation had a 1/1/10 balance in the Allowance for Doubtful Accounts of $20,000. During 2010, it wrote off $14,400 of accounts and collected $4,200 on accounts previously written off. The balance in Accounts Receivable was $400,000 at 1/1 and $480,000 at 12/31. At 12/31/10, Vasguez estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2010? A) $4,000. B) $14,200. C) $18,400. D) $24,000. Page 2
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6. On December 31, 2010, Flint Corporation sold for $75,000 an old machine having an original cost of $135,000 and a book value of $60,000. The terms of the sale were as follows: $15,000 down payment $30,000 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2010 rounded to the nearest dollar? (The
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This note was uploaded on 11/14/2010 for the course ACCOUNTING ACIS 3115 taught by Professor Lynn during the Fall '10 term at Rutgers.

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quiz789WORD - Accounting 350, Fall 2009 Quiz, Chpts 7,8 & 9...

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