On Monday, ABC candy company’s entire balance sheet comprised real assets of $500 million and cash of $ 50 million. It had no debt (nor preferred shares). On Tuesday ABC established a line of credit for $100 million with “Bank of Texas”. On Wednesday morning ABC drew down $20 million from its credit line and kept it in cash for later use. Which of the following is correct regarding PBC Wednesday afternoon?
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- On December 31 of the current year, the following accounts were discovered in the BT21 Company's ledger: Dr. Accounts Receivable is at P356,800; Cr. Bad Debt Allowance is for P8,760; Cr. Cash Sales is worth P913,800; and Cr. Credit Sales is worth P1,851,000. Five percent of the outstanding accounts receivable, according to analysis, won't be recovered. What amount of the allowance for bad debts will need to be adjusted on December 31?On October 31, 2020, a company had cash accounts at three different banks. One account balance is segregated solely for a November 15, 2020 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should these accounts be reported in the October 31, 2020 Statement of Financial Position? The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. O The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as current liability. The segregated and the regular accounts should be reported as current assets net of the overdraft. O The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdrafts.WeLuvSubprime Bank was undercapitalized on 9/30/20, when it had total assets of $500 million. On 12/31/20, it was still undercapitalized, and it had total assets of $530 million. Did the bank violate FDIC regulations regarding its total assets in the fourth quarter of the year? Yes No
- Your audit disclosed that on December 31, 2021, the accounts receivable control account of Eileen Company had a balance of P 2,865,000. An analysis of the accounts receivable account showed the following: Accounts known to be worthless P 37,500 Advance payments to creditors on purchase orders 150,000 Advances to affiliated companies 375,000 Customer’s accounts reporting credit balances arising from sales return (225,000) Interest receivable on bonds 150,000 Other trade accounts receivable -unassigned 750,000 Trade accounts receivable – assigned ( Eileen Company’s equity in assigned accounts is P 150,000) 375,000 Subscription receivables due in 30 days 825,000 Trade installment receivable due 1-18 months including unearned finance charges of P 30,000 330,000 Trade receivables from officers due currently 22,500 Trade accounts on which post-dated…20. The trade accounts receivable balance as at December 31, 2021 is A. P 1,522,500 B. P 1,147,500 C. P 1,485,000 D. p 1,447,500 21. The net current trade and other receivables as at December 31, 2021 is A. P 1,822,500 B. P 2,272,500 C. P 2,647,500 D. P 2,610,000 22. How much of the foregoing will be presented under noncurrent assets as at December 31, 2021? Α. ΡΟ B. P 375,000 C. P 525,000 D. P 1,200,000On July 1, Fisher Company sold 2,650,000 in accounts receivable for cash of 2,500,000. the factor withheld 10% of the cash proceeds to allow for possible customer returns and other adjustments. An Allowance For bad debts of 300,000 had previously been established by Fisher in relation to these accounts. What Was The Loss on Factoring Recognized by Fisher Company?
- ABC Corporation uses the cash basis of accounting. Damalerio collected P1,400,000 from its customers during the year. Damalaerio had P100,000 in Accounts receivable at the beginning of the year, and P180,000 in Accounts receivable at the end of the year. The company also had P40,000 and P50,000 of allowance for bad debts at the beginning and at the end of the year, respectively. What is ABC Corp's Sales Revenue under accrual basis of accounting assuming that company had sales discount amounting to P50,000 and sales returns (all before collections) amounting to P70,000. 1,480,000 1,530,000 1,550,000 1,600,000While preparing its bank reconciliation, Maynard Company determined that its bank had collected a $650 account receivable for the company and deducted a $25 collection fee. Which of the following shows the effect of this transaction on the financial statements? Assets = A. (25) B. 625 C. (25) D. 625 Multiple Choice Balance Sheet Liabilities + N/A N/A N/A N/A Option C Option B Option A Option D Stockholders Equity (25) 625 (25) 625 Revenue N/A 650 N/A 650 Income Statement Expense = Net Income Statement of Cash Flows 25 625 OA 25 650 OA 25 650 OA 25 625 OA (25) 625 (25) 625Churos Inc. began the current year with the following: Accounts receivable 2,000,000 Allowance for bad debts 100,000 During the current year, the following events transpired: Accounts written off 100,000 Cash sales 500,000 Sales on account 3,000,000 Bad debt expense recognized 200,000 At the end of the current year, the entity showed a balance in accounts receivable of P3,400,000 before the allowance for bad debts. Under cash basis, what amount should be reported as sales for the current year?A. 5,200,000B. 5,400,000C. 7,000,000D. 7,400,000
- Honduras Company revealed a balance of P8,200,000 in the accounts receivable control account at year-end. An analysis of the accounts receivable showed the following: Accounts known to be worthless 100,000 Advance payments to creditors on purchase orders 400,000 Advances to affiliated entities 1,000,000 Customers' accounts reporting credit balances arising from sales returns -600,000 Interest recivable on bonds 400,000 Trade accounts receivable-unassigned 2,000,000 Subscription receivable due in 30 days 2,200,000 Trade accounts receivable-assigned (Finance Company's equity asigned accounts is P500,000) 1,500,000 Trade installments receivable due in 1-18 months, including unearned finance charge of P50,000 850,000 Trade accounts receivable from officers, due currently 150,000 Trade…ABC Company has an accounts receivable balance of $50,000 at the beginning of the year and $70,000 at the end of the year. During the year, the company wrote off $5,000 in uncollectible accounts and recorded $10,000 in bad debt expense. What was the company's net realizable value of accounts receivable at the end of the year?The Lux Company experiences the following unrelated events and transactions during Year 1. The company’s existing current ratio is 2:1 and its quick ratio is 1.2:1. Lux wrote off $5,000 of accounts receivable as uncollectible. A bank notifies Lux that a customer’s check for $411 is returned marked insufficient funds. The customer is bankrupt. The owners of Lux Company make an additional cash investment of $7,500. Inventory costing $600 is judged obsolete when a physical inventory is taken. Lux declares a $5,000 cash dividend to be paid during the first week of the next reporting period. Lux purchases long-term investments for $10,000. Accounts payable of $9,000 are paid. Lux borrows $1,200 from a bank and gives a 90-day, 6% promissory note in exchange. Lux sells a vacant lot for $20,000 that had been used in its operations. A three-year insurance policy is purchased for $1,500 Separately evaluate the immediate effect of each transaction on the company’s:…