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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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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- Action Signs recorded credit sales of $10,000 on the gross method. Terms are 2/20, n/30. How would the entry to this sale be recorded? cash decreases by $3,000 sales discounts increase by $200 sales increases by $9,800 accounts receivable increases by $10,000arrow_forwardM6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns L06-1 Total gross sales for the period include the following: Credit card sales (discount 34) Sales on account (2/15, n/60) $10,000 $10,200 Sales returns related to sales on account were $250. All returns were made before payment. One-half of the remaining sales on account were paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income statement as net sales? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. $ 19,950.00 Net salesarrow_forwardLogan Sales provides the following information: Net credit sales: $770,000 Beginning net accounts receivable: $45,000.00 Ending net accounts receivable: $22,000 Calculate the accounts receivable turnover ratio. (Round your answer to the nearest whole number.) A. 23 times B. 35 times C. 33 times D. 17 timesarrow_forward
- M6-2 (Algo) Reporting Net Sales with Sales Discounts, Credit Card Discounts, and Sales Returns LO6-1 Total gross sales for the period include the following: Credit card sales (discount 3%) Sales on account (3/15, n/60) $ 10,300 $ 11,000 Sales returns related to sales on account were $200. All returns were made before payment. One- half of the remaining sales on account were paid within the discount period. The company treats all discounts and returns as contra-revenues. What amount will be reported on the income statement as net sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Net salesarrow_forwardcompany reported credit sale of 6252900 and cost of goods sold of 3300000 for the year. the acconunt receivable balance at the beginning and end of the year were 516000 and 581000. receivables turnover ratio is 1. 10.8 2. 6.0 3. 11.4 4. 5.7arrow_forwardThe following information has been extracted from the annual reports of Lilydale Ltd and Monbulk Ltd. Lilydale Ltd Monbulk Ltd $2 950 300 17 100 Sales (net credit) revenue for year Allowance for Doubtful Debts, 1/7/18 Allowance for Doubtful Debts, 30/6/19 Accounts receivable (gross) 1/7/18 Accounts receivable (gross) 30/6/19 $2 204 300 27 100 19780 28 100 722 650 368 000 485 800 384 200 (a) Calculate the receivables turnover ratio and average collection period for both companies. Comment on the difference in their collection experiences. (b) Compare the success or otherwise of their cash collection policies, given that the average receivables turnover for the industry in which the companies operated is 7. Credit terms for both companies are 2/10, n/30.arrow_forward
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