Recording Sales-Gross & Net
On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for sales discounts.
What is the correct entry for Flores on November 10?
Debit, Accounts receivable, $8,000
Credit, Sales, $8,000
The allowance for uncollectible accounts is what type of an account:
Contra asset account.
Name a financing activity
Examples: Payment of cash dividends, cash paid to payoff note payable, cash received from issuance of common stock
Purchase of merchandise
Operating
Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of the current year, with terms 1/15, n/60. Harvey uses the net method of accounting for sales discounts.
What entry would Harvey's make on April 12?
Debit, Accounts receivable, $45,540
Credit, Sales, $45,540
Collection of accounts receivable that previously have been written off results in an increase in cash and an increase in:
Allowance for uncollectible accounts.
Cash paid to suppliers under the direct method is computed as:
A) Cost of goods sold plus a decrease in inventory and minus an increase in accounts payable.
B) Cost of goods sold minus an increase in inventory and plus an increase in accounts payable.
C) Cost of goods sold plus an increase in inventory and minus an increase in accounts payable.
D) Cost of goods sold minus a decrease in inventory and plus an increase in accounts payable.
C) Cost of goods sold plus an increase in inventory and minus an increase in accounts payable.
Purchase of building
Investing
On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for sales discounts.
What is the correct entry for Flores on December 5, assuming the correct payment was received on that date?
Debit, Cash, $8,000
Credit, Accounts receivable, $8,000
As of January 1, 2024, Barley Company had a credit balance of $526,000 in its allowance for uncollectible accounts. Based on experience, 2% of Barley's gross accounts receivable have been uncollectible. During 2024, Barley wrote off $656,000 of accounts receivable. Barley's gross accounts receivable as December 31, 2024 is $18,300,000.
In its December 31, 2024, balance sheet, what amount should Barley report as allowance for uncollectible accounts?
$366,000
$18,300,000 × 2% = $366,000
During the year, cash increased by $460 million. Investing and financing activities created positive cash flow totaling $770 million. What were net cash flows from operating activities in the statement of cash flows?
Outflow of $310 million
$460 million − $770 million = $(310) million
Sale of common stock
Financing
On November 10 of the current year, Flores Mills sold carpet to a customer for $7,200 with credit terms 2/10, n/30. Flores uses the gross method of accounting for sales discounts.
What is the correct entry for Flores on November 17, assuming the correct payment was received on that date?
Debit, Cash, $7,056,
Debit, Sales discounts, $144
Credit, Accounts receivable, $7,200
Calistoga Produce estimates bad debt expense at 0.30% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $473,000 and $1,620 respectively, at December 31, 2023. During 2024, Calistoga's credit sales and collections were $328,000 and $313,000, respectively, and $1,880 in accounts receivable were written off.
Calistoga's 2024 bad debt expense is:
$984
($ 328,000 × 0.30%=$ 984)
Creble Company reported net income for 2024 in the amount of $48,000. The company's financial statements also included the following:
Increase in accounts receivable $4800
Decrease in inventory $2300
Depreciation expense $3100
Gain on sale of equipment $4600
In the statement of cash flows what is net cash provided by operating activities under the indirect method?
$44,000
48000-4800+2300+3100-4600
Issuance of bonds
Financing
Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of the current year, with terms 1/15, n/60. Harvey uses the net method of accounting for sales discounts.
What entry would Harvey's make on June 10, assuming the customer made the correct payment on that date?
Debit, Cash, $46,000
Credit, Accounts receivable, $45,540
Credit, Sales discounts forfeited, $460
The following information relates to Halloran Company's accounts receivable for 2024:
Accounts receivable balance, 1/1/2024Credit sales for 2024Accounts receivable written off during 2024Collections from customers during 2024Allowance for uncollectible accounts balance, 12/31/2024$ 840,0003,300,00070,0003,100,000210,000
What amount should Halloran report for accounts receivable, before allowances, at December 31, 2024?
$970,000
$840,000 + $3,300,000 − $70,000 − $3,100,000 = $970,000
Selected information from Isadore Bell Corporation's accounting records and financial statements for 2024 is as follows ($ in millions):
Cash paid to acquire equipment $120
Cash paid to acquire land $54
Treasury stock acquired with cash and then retired $75
Dividend revenue received $66
Gain from the sale of buildings $78
Proceeds from sale of buildings $135
In its statement of cash flows, Isadore Bell should report net cash outflows from investing activities of:
$39 million.
$135 million (proceeds from sale of buildings) − $54 (cash paid to acquire land) − $120 million (cash paid to acquire equipment).
Payment of semiannual interest on bonds payable
Operating