Ch5 - E5-16 1 Trading Investment she plans to hold i t for...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: E5-16 1. Trading Investment; she plans to hold i t for one month and then sell it for p rofit 2. 12/15 Short-Term Investments 55,000 Cash 55,000 Purchase Investment 12/31 Cash 8,000 Unrealized Gain on Investment 8,000 Received cash dividend 63,000 - 55,000 = 8,000 3. a. Balance Sheet: Current assets Short-term investments, at market value.......................... $63,000 b. I ncome Statement: Other revenue, gains, and losses Unrealized Gain on Investment .......................................... $8,000 E5-21 Accounts Receivable Sales Revenue Cash Accounts Receivable Allowance for Uncollectible Accounts Accounts Receivable Uncollectable Account Expense (100,000 x .02) Allowance for Uncollectable Accounts 100,000 100,000 94,000 94,000 1,700 1,700 2,000 2,000 Accounts Receivable 40,000 94,000 100,000 1,700 44,300 TOTAL Allowance for Uncollectible Accounts 1,700 3,000 2,000 TOTAL 3,300 Google expects to collect the newt accounts receivable, or (44,300 – 3,300) = 41,000 3. Balance Sheet: Current Assets: Accounts receivable, net of allowance for doubtful accounts of $33,000……….. $41,000 E5-22 Uncollectible Account Expense Accounts Receivable 1,700 1,700 Accounts Receivable 40,000 100,000 94,000 1,700 44,300 TOTAL Google does not expect to collect the full amount because i t’s unrealistic to think that all the buyers will pay their debts. E5-23 (110,000 x .005) + (60,000 x .01) + (50,000 x .06) + (15,000 x .4) = 10,150 The 7,400 balance is too low. Doubtful Account Expense (10,150 – 7,400) Allowance for Doubtful Accounts 2,750 2,750 A llowance for Doubtful Accounts 7400 2750 TOTAL 10,150 Balance Sheet: Current Assets: Cash XX Short Term Investments Accounts receivable, net of allowance for doubtful accounts 10,150 $224,850 E5-28 137 + 30 +37 = 0.99 (STRONG) (48 + 158) One Day’s Sales = 450 = 1.233 365 Day’s sales in average receivables = (37 + 42) / 2 = 32 days (OKAY) 1.233 XX ...
View Full Document

This note was uploaded on 08/30/2011 for the course ACG 2021 taught by Professor Hornik during the Fall '08 term at University of Central Florida.

Page1 / 3

Ch5 - E5-16 1 Trading Investment she plans to hold i t for...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online