Exam2_Fall2007_VersionB_Solution

Exam2_Fall2007_Versi - BOSTON UNIVERSITY School of Management Professor Ana Albuquerque Financial Accounting SMG AC 221 Mid-Term Exam II(B(100

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
BOSTON UNIVERSITY School of Management Professor Ana Albuquerque Financial Accounting SMG AC 221 Mid-Term Exam II (B) October 16, 2007 (100 points) DO NOT OPEN THIS EXAM UNTIL INSTRUCTED TO DO SO Note: You have 1:30 hours. No partial credit. Good luck! Please Read: By signing your name on this page, you certify that all work on this exam is your own. Any communication during the exam, including through electronic devices, is strictly prohibited. A violation of this agreement is a breach of the University’s code of academic honesty and will result in serious penalties. Show all work for full credit. Signature Name (please print): ___ _SOLUTION __________ SID: ____________________ Section (circle one): B1: 8:00 – 9:30 am C3: 11:00 – 12:30 pm C1: 12:30 – 2:00 pm 8
Background image of page 1

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

View Full DocumentRight Arrow Icon
Question 1 (35 points) ______________________ Question 2 (35 points) ______________________ Question 3 (30 points) ______________________ TOTAL EXAM (100 points) _________________ (SCORE) 8
Background image of page 2
Question 1 (35 points) Brookline Company had the following account balances related to credit sales and receivables information at the end of 2005: (i) Customers owed the company $250,000 (gross); (ii) Allowance for Doubtful Accounts showed a credit balance of 22,000. During 2006, Brookline Company recorded credit sales of $2,100,000. In 2006, the company also received information that a customer owing $20,000 had gone bankrupt. This amount was written off. The accounts receivable balance (gross) at the end of 2006 was $550,000. Required a. (5 points) How much cash did the company collect from customers during 2006? Amount of cash collected : $1,780 Calculations 250+2,100-Cash-20=550 Cash=1,780 b. (6 points) Prepare the journal entry for the amount of bad debt written off during 2006. Journal entry Allowance for Bad Debt 20,000 A/R 20,000 c. (4 points) What was the effect of the bad debt write-off on the company’s 1. Pretax Income for 2006? (circle one) Increase / Decrease / No change 2. Total Net Assets at end of 2006? (circle one) Increase / Decrease / No change d. (8 points) Brookline Company estimates that 2% of its credit sales will prove to be
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This test prep was uploaded on 04/07/2008 for the course AC 221 taught by Professor Albuquerque during the Fall '08 term at BU.

Page1 / 8

Exam2_Fall2007_Versi - BOSTON UNIVERSITY School of Management Professor Ana Albuquerque Financial Accounting SMG AC 221 Mid-Term Exam II(B(100

This preview shows document pages 1 - 4. Sign up to view the full document.

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