The company needs additional cash management can

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Chapter 25 / Exercise 9
Financial Markets & Institutions
Madura
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the company needs additional cash, management can accelerate the collection of cash from receivables by selling (factoring) its receivables or by allowing customers to pay with bank credit cards.1. A receivable that is evidenced by a formal instrument and that normally requires the payment of interest is: (a) an account receivable.(b) a trade receivable.(c) a note receivable.(d) a classified receivable.(LO 1) 2. Receivables are frequently classified as: 3. Kersee Company on June 15 sells merchandise on account to Eng Co. for $1,000, terms 2/10, n/30. On June 20, Eng Co. returns merchandise worth
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Financial Markets & Institutions
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Chapter 25 / Exercise 9
Financial Markets & Institutions
Madura
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$300 to Kersee Company. On June 24, payment is received from Eng Co. for the balance due. What is the amount of cash received? 4. Accounts and notes receivable are reported in the current assets section of the balance sheet at: 5. Net credit sales for the month are $800,000. The accounts receivable balance is $160,000. The allowance is calculated as 7.5% of the receivables balance using the percentageofreceivables basis. If Allowance for DoubtfulAccounts has a credit balance of $5,000 before adjustment, what is the balance after adjustment? (a) $12,000.(b) $7,000.(c) $17,000.(d) $31,000.(LO 3) 6. In 2017, Patterson Wholesale Company had net credit sales of $750,000. On January 1, 2017, Allowance for Doubtful Accounts had a credit balance of $18,000. During 2017, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentageofreceivables basis). If the accounts receivable balance at December 31 was $200,000, what is the required adjustment to Allowance for Doubtful Accounts at December 31, 2017? 7. An analysis and aging of the accounts receivable of Raja Company at December 31 reveal these data:Accounts receivable$800,000Allowance for doubtful accounts per books before adjustment (credit) 50,000
Amounts expected to become uncollectible65,000What is the cash realizable value of the accounts receivable at December 31, after adjustment?

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