Foti co accepts a 1000 3 month 12 promissory note in

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12. Foti Co. accepts a $1,000, 3-month, 12% promissory note in settlement of an account with Bartelt Co. The entry to record this transaction is as follows. a. Notes Receivable 1,030 Accounts Receivable 1,030 b. Notes Receivable 1,000 Accounts Receivable 1,000 c. Notes Receivable 1,000 Sales 1,000 d. Notes Receivable 1,020 Accounts Receivable 1,020 13. Ginter Co. holds Kolar Inc.’s $10,000, 120-day, 9% note. The entry made by Ginter Co. when the note is collected, assuming no interest has been previously accrued, is: 14. Accounts and notes receivable are reported in the current assets section of the balance sheet at: 15. Oliveras Company had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in accounts receivable at the beginning of the year was $100,000, and the end of the year it was $150,000. What were the accounts receivable turnover ratio and the aver- age collection period in days? (SO 3) (SO 3) (SO 3) (SO 3) (SO 4) (SO 6) (SO 6) (SO 4) (SO 8) (SO 9) (SO 9) PDF Watermark Remover DEMO : Purchase from to remove the watermark
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Brief Exercises 421 QUESTIONS 1. What is the difference between an account receivable and a note receivable? 2. What are some common types of receivables other than accounts receivable and notes receivable? 3. Texaco Oil Company issues its own credit cards. Assume that Texaco charges you $40 on an unpaid balance. Prepare the journal entry that Texaco makes to record this revenue. 4. What are the essential features of the allowance method of accounting for bad debts? 5. Jerry Gatewood cannot understand why cash realizable value does not decrease when an uncollectible account is written off under the allowance method. Clarify this point for Jerry Gatewood. 6. Distinguish between the two bases that may be used in es- timating uncollectible accounts. 7. Eaton Company has a credit balance of $3,500 in Allowance for Doubtful Accounts. The estimated bad debts expense under the percentage-of-sales basis is $4,100. The total estimated uncollectibles under the percentage-of-receivables basis is $5,800. Prepare the ad- justing entry under each basis. 8. How are bad debts accounted for under the direct write- off method? What are the disadvantages of this method? 9. DeVito Company accepts both its own credit cards and national credit cards. What are the advantages of accept- ing both types of cards? 10. An article recently appeared in the Wall Street Journal in- dicating that companies are selling their receivables at a record rate.Why are companies selling their receivables?
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