FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The president of Sheridan Enterprises asks if you could indicate the impact certain transactions have on the following ratios.
Complete the table, indicating whether each transaction will increase, decrease, or have no effect on the specific ratios provided for Sheridan Enterprises.
Transaction
1.
Received $7,300 on cash sale. The cost of the goods sold was $3,796
2.
Recorded bad debt expense of $730 using allowance method.
3.
Wrote off a $146 account receivable as uncollectible (Uses allowance method.)
4.
Recorded $3,650 sales on account. The cost of the goods sold was $2,190.
Save for Later
Current Ratio
(2:1)
Accounts Receivable Turnover
(10X)
Average Collection Period
(36.5 days)
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Transcribed Image Text:The president of Sheridan Enterprises asks if you could indicate the impact certain transactions have on the following ratios. Complete the table, indicating whether each transaction will increase, decrease, or have no effect on the specific ratios provided for Sheridan Enterprises. Transaction 1. Received $7,300 on cash sale. The cost of the goods sold was $3,796 2. Recorded bad debt expense of $730 using allowance method. 3. Wrote off a $146 account receivable as uncollectible (Uses allowance method.) 4. Recorded $3,650 sales on account. The cost of the goods sold was $2,190. Save for Later Current Ratio (2:1) Accounts Receivable Turnover (10X) Average Collection Period (36.5 days)
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