TB MC Qu. 8-90 (Algo) In January 2024, Summit Department... In January 2024, Basu Department Store sells a gift card for $150 and receives cash. In February 2024, the customer comes back and spends $120 of the gift card to purchase a water bottle. What is the financial statement effect of the customer's purchase of the water bottle in February? Multiple Choice Decrease liabilities by $120 and increase stockholders' equity by $120 Increase assets by $30, decrease liabilities by $150, and increase stockholders' equity by $120 Increase assets by $30, decrease liabilities by $120, and increase stockholders' equity by $150 Increase assets by $120 and increase stockholders' equity by $120

TB MC Qu. 8-90 (Algo) In January 2024, Summit Department... In January 2024, Basu Department Store sells a gift card for $150 and receives cash. In February 2024, the customer comes back and spends $120 of the gift card to purchase a water bottle. What is the financial statement effect of the customer's purchase of the water bottle in February? Multiple Choice Decrease liabilities by $120 and increase stockholders' equity by $120 Increase assets by $30, decrease liabilities by $150, and increase stockholders' equity by $120 Increase assets by $30, decrease liabilities by $120, and increase stockholders' equity by $150 Increase assets by $120 and increase stockholders' equity by $120

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 8PA: The following select financial statement information from Candid Photography. Compute the accounts...

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Roswell Company purchasesinventory from Clear Pool Supplies on June 1. The sales terms on the invoice from Clear PoolSupplies are 3/10, n/30. What does this mean? What is Roswell’s potential savings, if any? Howmuch time does the company have to take advantage of these savings?
Novak Corp. has accounts receivable of $111,000 at March 31, 2022. An analysis of the accounts shows these amounts. Balance, March 31 Month of Sale 2022 2021 March $61,000 $81,000 February 13,300 8,300 December and January 11,300 2,700 November and October 7,200 1,400 $92,800 $93,400 Credit terms are 2/10, n/30. At March 31, 2022, there is a $3,700 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below Age of Accounts Estimated PercentageUncollectible Current 2 % 1–30 days past due 7 31–90 days past due 25 Over 90 days past due 50 Determine the total estimated uncollectible accounts receivable. Total estimated uncollectibles accounts receivable $Enter the total estimated uncollectibles…
D. G. H. K. 3 During the last week of March, Siro Stereo's owner approaches the bank for a $125,000 loan to 4 be made on April 1 and repaid on June 30 with annual interest of 10%, for an interest cost of 5 $3,125. The owner plans to increase the store's inventory by $100,000 in April and needs the 6 loan to pay for inventory acquisitions. The bank's loan officer needs more information about 7 Siro Stereo's ability to repay the loan and asks the owner to forecast the store's June 30 cash 8 position. On April 1, Siro Stereo is expected to have a $12,000 cash balance, $121,500 of 9 accounts receivable, and $90,000 of accounts payable. Its budgeted sales, merchandise 10 purchases, and various cash disbursements for the next three months follows: 11 June April 350,000 12 May 13 Sales 500,000 550,000 14 Mdse purchases 15 Other cash disbursements: Рayroll Rent 250,000 200,000 190,000 16 22,500 30,000 37,500 17 12,000 12,000 12,000 18 Other cash expenses 9,000 13,500 16,500 125,000 19…
Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Uptons balance sheet as of December 31, 2019, is shown here (millions of dollars): Sales for 2019 were 350 million, and net income for the year was 10.5 million, so the firms profit margin was 3.0%. Upton paid dividends of 4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 25%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2020. a. If sales are projected to increase by 70 million, or 20%, during 2020, use the AFN equation to determine Uptons projected external capital requirements. b. Using the AFN equation, determine Uptons self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? c. Use the forecasted financial statement method to forecast Uptons balance sheet for December 31, 2020. Assume that all additional external capital is raised as a line of credit at the end of the year. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Assume Uptons profit margin and dividend payout ratio will be the same in 2020 as they were in 2019. What is the amount of the line of credit reported on the 2020 forecasted balance sheets? (Hint: You dont need to forecast the income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2020 addition to retained earnings for the balance sheet without actually constructing a full income statement.)
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Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?
The following select financial statement information from Candid Photography. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Candid Photography if industry average for accounts receivable turnover ratio is 3 times and days sales in receivables ratio is 150 days?
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Aging Method Spotted Singer Ltd. sells karaoke machines to businesses and consumers via the Internet. On December 31, 2021, Spotted Singer has an accounts receivable balance of $997,000 and a credit balance in its allowance for doubtful accounts of $24,000. During 2022, Spotted Singer had $2,500,000 of credit sales, collected $1,725,000 of accounts receivable, and had customer defaults of $45,000. At year-end, an aging analysis indicates that $28,000 of Spotted Singer's receivables will be uncollectible. Required: 1. Calculate Spotted Singer's balance in accounts receivable on December 31, 2022, prior to the adjustment. 2. Calculate Spotted Singer's balance in allowance for doubtful accounts on December 31, 2022, prior to the adjustment. 3. Prepare the necessary adjusting entry for 2022.
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INFORMATIONThe following information was provided by Intel Enterprises:1. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable).2. Credit sales are expected to be as follows:December 2022 January 2023 February 2023R576 000 R540 000 R648 0003. Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customersreceive a 10% discount.4. Credit sales are normally collected as follows:* 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount.* 65% in the following monthThe rest is usually written off as bad debts.5. Budgeted purchases of inventory are as follows:December 2022 January 2023 February 2023R1 000 000 R800 000 R920 0006. Fifty percent (50%) of the purchases are for cash. The remainder is paid in the month after the purchase.7. The monthly salaries amount to R150 000. Salaries are expected to increase by 9% with…
Please help to solve the whole question please this is 1 question with 3sub parts. InvisiGuard Ltd sells security doors. Majority of its sales are on credit except small amount of cash sales each year. The accounting records at 30 June 2019 reveal the following. Ignore GST. Credit sales (for the year of 2019) $2,100,000 Cash sales (for the year of 2019) 20,000 Credit sales returns and allowances (for the year of 2019) 80,000 Accounts receivable (balance at 30 June 2019) 593,000 Allowance for doubtful debts (credit balance at 30 June 2019) 2,800 The company’s yearly bad debts expense had been estimated at 2.5% of net credit sales revenue in the past. The management of InvisiGuard Ltd has decided to compare the current method with an ageing of accounts receivable method. The following analysis was obtained with respect to the accounts receivable. Balance % of estimated uncollectable Accounts not yet due $351,200 1 Accounts…