FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
![### Accounting Practice Questions
**4. Number of Days’ Sales in Receivables Calculation**
Assume a business sold a total of $839,500 during the current year and its accounts receivable balance at the end of the year was $73,600. What is the number of days’ sales in receivables?
To calculate the number of days' sales in receivables, use the following formula:
\[ \text{Number of Days' Sales in Receivables} = \left( \frac{\text{Accounts Receivable}}{\text{Total Sales}} \right) \times 365 \]
Given:
- Total Sales = $839,500
- Accounts Receivable = $73,600
Plugging in the values:
\[ \text{Number of Days' Sales in Receivables} = \left( \frac{73,600}{839,500} \right) \times 365 \]
Calculating this will give us the number of days required to collect receivables.
**5. Journal Entry for Issuing Bonds**
Assume that $1 million five-year bonds paying an interest rate of 10% are issued when the market rate of interest is also 10%. What is the journal entry to record this event?
When bonds are issued at a rate equal to the market rate, they are issued at par value. The journal entry to record the issuing of bonds at par value would be:
**Journal Entry:**
| Date | Account Titles and Explanation | Debit ($) | Credit ($) |
| ----------- | ------------------------------------- | ----------- | ----------- |
| [Date] | Cash | 1,000,000 | |
| | Bonds Payable | | 1,000,000 |
**Explanation:**
- **Debit Cash:** Reflects the cash received from issuing the bonds.
- **Credit Bonds Payable:** Records the liability created from issuing the bonds which the business has to pay back with interest.
These questions assist in understanding the practical applications of calculating financial ratios and recording journal entries for bond issuance in accounting.](https://content.bartleby.com/qna-images/question/bdebabb4-53e6-4e3e-8c1d-987b854fcf5d/76058769-4d16-4cb1-a0e1-1a20e39e4e34/dl02asi.png)
Transcribed Image Text:### Accounting Practice Questions
**4. Number of Days’ Sales in Receivables Calculation**
Assume a business sold a total of $839,500 during the current year and its accounts receivable balance at the end of the year was $73,600. What is the number of days’ sales in receivables?
To calculate the number of days' sales in receivables, use the following formula:
\[ \text{Number of Days' Sales in Receivables} = \left( \frac{\text{Accounts Receivable}}{\text{Total Sales}} \right) \times 365 \]
Given:
- Total Sales = $839,500
- Accounts Receivable = $73,600
Plugging in the values:
\[ \text{Number of Days' Sales in Receivables} = \left( \frac{73,600}{839,500} \right) \times 365 \]
Calculating this will give us the number of days required to collect receivables.
**5. Journal Entry for Issuing Bonds**
Assume that $1 million five-year bonds paying an interest rate of 10% are issued when the market rate of interest is also 10%. What is the journal entry to record this event?
When bonds are issued at a rate equal to the market rate, they are issued at par value. The journal entry to record the issuing of bonds at par value would be:
**Journal Entry:**
| Date | Account Titles and Explanation | Debit ($) | Credit ($) |
| ----------- | ------------------------------------- | ----------- | ----------- |
| [Date] | Cash | 1,000,000 | |
| | Bonds Payable | | 1,000,000 |
**Explanation:**
- **Debit Cash:** Reflects the cash received from issuing the bonds.
- **Credit Bonds Payable:** Records the liability created from issuing the bonds which the business has to pay back with interest.
These questions assist in understanding the practical applications of calculating financial ratios and recording journal entries for bond issuance in accounting.
Expert Solution
arrow_forward
Step 1
Number of days' sales in receivables is the number of days it take to collect the accounts receivable.
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Accounts Receivable Analysis The following data are taken from the financial statements of Basinger Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Accounts receivable, end of year $171,400 $179,000 $186,000 Sales on account 1,068,720 1,003,750 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Y3 20Y2 1. Accounts receivable turnover fill in the blank 1 fill in the blank 2 2. Number of days' sales in receivables fill in the blank 3 days fill in the blank 4 days b. The collection of accounts receivable has . This can be seen in both the in accounts receivable turnover and the in the collection period.arrow_forward6. Michaels Corp. has a current accounts receivable balance of $623,410. Credit sales for the year just ended were $5,410,695. What is the receivables turnover? The days’ sales in receivables? How long did it take on average for credit customers to pay off their accounts during the past year?arrow_forwardA company reports the following: Sales $838,040 Average accounts receivable (net) 51,100 Round your answers to one decimal place. Assume a 365-day year. a. Determine the accounts receivable turnover. b. Determine the number of days' sales in receivables.arrow_forward
- Q6. Pujols Lumber Yard has a current accounts receivable balance of $394,539. Credit sales for the year just ended were $6,236,838. How long did it take on average for credit customers to pay off their accounts during the past year? (Enter the answer with 2 decimal places (e.g. 23.45)arrow_forward4. The following select financial statement information from Hogge Computing. Compute the accounts receivable turnover ratios and the number of days' sales in receivables ratios for 2021 and 2022 (round answers to two decimal places). Year 2020 2021 2022 2021: Net Credit Sales 2022: $1,557,200 $1,755,310 $1,965,170 Accounts Receivable Turnover Ratio: • Days' Sales: days Accounts Receivable Turnover Ratio: Days' Sales: days times times Ending Accounts Receivable $397,000 $465,200 $505,780arrow_forwardA company reports the following: Sales $1,460,000 Average accounts receivable (net) 100,000 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover fill in the blank 1 b. Number of days' sales in receivables fill in the blank 2 daysarrow_forward
- What is the net realizable value of accounts receivable at the end of year, given the following information:Balance in Accounts Receivable at end of year, $104,000Balance in Allowance for Doubtful Accounts, beginning of year, $2,000 debitWrite-offs during year, $5,000Bad debt expense for year, $9,000Recoveries during year of accounts previously written-off, $2,000arrow_forwardAccounts Receivable Analysis The following data are taken from the financial statements of Basinger Inc. Terms of all sales are 2/10, n/45. 20Y3 20Y2 20Y1 Accounts receivable, end of year $157,200 $164,000 $171,800 Sales on account 883,300 789,130 a. For 20Y2 and 20Y3, determine (1) the accounts receivable turnover and (2) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. 20Y3 20Y2 1. Accounts receivable turnover 2. Number of days' sales in receivables days days This can be seen in both the in accounts receivable b. The collection of accounts receivable has turnover and the in the collection period.arrow_forwardSubject: accountingarrow_forward
- Twist Corp. has a current accounts receivable balance of $438,726. Credit sales for the year just ended were $3,830,500. What is the receivables turnover?arrow_forwardIf you are told that LSJ Company turns its accounts receivable over every 33 days…this would represent an example of what type of analysis: a. Vertical Analysis b. Horizontal Analysis c. Ratio Analysisarrow_forwardA company reports the following: Sales $1,359,990 Average accounts receivable (net) 83,950 Round your answers to one decimal place. Assume a 365-day year. a. Determine the accounts receivable turnover.fill in the blank 1 b. Determine the number of days' sales in receivables.fill in the blank 2arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education