Chapter 4
Would a sale of inventory on account involve a cash of cash equivilent at time of sale?
No
The formula for Net Revenues
Net Revenues = Revenues - Contra-Revenues
The Formula for Weighted Average Costing
(Total cost of units available for sale)/(Total number of units available for sale)
Investing
Financing
Operating
Does the Allowance for Uncollectable Accounts have a normal debit or credit balance
CREDIT
Consider the following purchase schedule:
May 1st 100 Units @ $10, May 10th 250 units @ $12
May 30th 150 units @ $15
What is the weighted average cost per unit?
12.50
Consider thee asset accounts:
Supplies: $300, Currency: $100, Inventory: $200, A/R: 100, Savings Account: $150, checks from customers not yet cashed: $50
What is the total cash?
Blue inc. performed a service on account for $200 with the terms 2/10, N/20. Assuming the customer pays within the discount period, what journal entry should be made for the receipt of money.
Cash 196
Discount 4
A/R 200
Consider the following purchase schedule:
May 1st 100 Units @ $10, May 10th 250 units @ $12
May 30th 150 units @ $15
If Blue inc. sold 300 units, what is COGS under FIFO
3400
If Blue Inc. sells a piece of equipment that is no longer in use for cash. How would this cash inflow be classified?
Investing
A customer that owed Blue Inc. $100 calls to say that they will be unable to pay their balance. What journal entry should be made
Allow 100
A/R 100
Blue inc. Purchased 100 units of inventory for $4 each. Blue inc. later sells 80 of these units for $7 each. What Journal entries should be made on the day of the sale.
Cash 560
Sales 560
COGS 320
Inventory 320
If a customer pays cash for a purchase they had previously made on account, how is the cashflow classified?
Operating
Blue inc. has an Accounts Receivable balance of $1,000 and estimates that 15% will be uncollectible. If Blue inc. currently has a debit balance of $50 in the Allowance account, what is the Bad Debt Expense for the year.
$200 (.15*1,000= 150 150+50 = 200)
BDE 200
Allow 200
On October 1, 2024, Orange Corporation loans one of its employees $32,000 and accepts a 12-month, 8% note receivable.
Calculate the amount of interest revenue Orange will recognize in 2024 and 2025
2024 640
2025 1920