Question :
51.The following information concerning the current assets and current liabilities : 1253650
51.The following information concerning the current assets and current liabilities of
Mason Company at December 31, 2010, is presented below.
Current Assets
Cash
$6,700
Accounts Receivable
$7,900
Less Allowance
(70)
7,830
Inventory
2,270
Prepaid expenses
500
Total
$17,300
Current Liabilities
Accounts payable
$9,000
Wages payable
500
Taxes payable
200
Rent payable
1,600
Notes payable
2,000
Total
$13,300
Based on this information, how would the quick ratio be affected if Masonpurchased $1,300 of inventory on account?
The quick ratio would decrease from 1.30 to 1.21.
b. The quick ratio would not change.
c. The quick ratio would decrease from 1.09 to 1.00.
d. The quick ratio would decrease from 1.09 to 1.21.
52.The following information concerning the current assets and current liabilities of
Mason Company at December 31, 2010, is presented below.
Current Assets
Cash
$6,700
Accounts Receivable
$7,900
Less Allowance
(70)
7,830
Inventory
2,270
Prepaid expenses
500
Total
$17,300
Current Liabilities
Accounts payable
$9,000
Wages payable
500
Taxes payable
200
Rent payable
1,600
Notes payable
2,000
Total
$13,300
Based on this information, what would the quick ratio be if Masonsold all of its inventory for $6,000 cash?
a. The quick ratio would decrease from 1.09 to 0.19.
b. The quick ratio would decrease from 1.30 to 0.85.
c. The quick ratio would increase from 1.30 to 1.54.
d. The quick ratio would increase from 1.09 to 1.54.
53.Sanchez Inc. sells to customers only on credit. For the year ended December 31, 2010, the following information is provided:
Sales revenue
$850,000
Accounts receivable, 1/01/10
230,000
Allowance for doubtful accounts, 12/31/10(before adjustment for bad debts)
600
Collections during 2010
470,000
Accounts written off as uncollectible during 2010
13,000
Sales returns
7,000
What is the balance of the Accounts Receivable account at December 31, 2010?
a. $1,525,000
b. $590,000
c. $205,000
d. $135,000
54.Sanchez Inc. sells to customers only on credit. For the year ended December 31, 2010, the following information is provided:
Sales revenue
$850,000
Accounts receivable, 1/01/10
230,000
Allowance for doubtful accounts, 12/31/10(before adjustment for bad debts)
600
Collections during 2010
470,000
Accounts written off as uncollectible during 2010
13,000
Sales returns
7,000
If Sanchez estimates bad debts at 5% of net credit sales, how much is bad debt expense?
a. $34,000
b. $15,200
c. $23,400
d. $42,150
55.The balances of the allowance for doubtful accounts on the balance sheets dated December 31 of 2010 and 2009 were $2,000 and $7,000, respectively. During 2010, bad debts expense was $12,000. What is the amount of accounts receivable that were written off as uncollectible during 2010?
a. $22,000
b. $8,000
c. $17,000
d. $2,000
56. The following information is provided for Atlanta, Inc..
Balance Sheet
2010
2009
Cash and cash equivalents
$89,000
$106,000
Accounts Receivables, less allowance for doubtful accounts of $4,600 (2010) and $2,000 (2009)
198,000
154,000
How much is the balance in the Accounts Receivable account at December 31, 2010?
a. $193,600
b. $158,600
c. $202,600
d. $203,600
57. The following information is provided for AtlantaInc.
Balance Sheet
2010
2009
Cash and cash equivalents
$89,000
$106,000
Accounts Receivables, less allowance for doubtful accounts of $4,600 (2010) and $2,000 (2009)
198,000
154,000
What is the amount of the Net Realizable Value of the receivables at December 31, 2010?
a. $198,000
b. $154,000
c. $193,600
d. $190,400
58.The following information was taken from the unadjusted trial balance and aging schedule of Diane Company on December 31, 2010. All sales are on account.
Accounts and related balances at December 31, 2010 before adjustment:
Debit
Credit
Accounts receivable
$46,000
Allowance for doubtful accounts
$ 680
Sales (all on account)
500,000
Sales returns
3,000
Aging Schedule of Accounts Receivable:
Age
Amount
% Uncollectible
0-30 days
$14,000
5%
30-60 days
20,000
8%
Over 60 days
12,000
12%
If Diane uses the aging schedule of accounts receivable to determine bad debts, what is the bad debts expense for the year ending December 31, 2010?
a. $4,280
b. $3,600
c. $3,680
d. $3,060
59.The following information was taken from the unadjusted trial balance and aging schedule of Diane Company on December 31, 2010. All sales are on account.
Accounts and related balances at December 31, 2010 before adjustment:
Debit
Credit
Accounts receivable
$46,000
Allowance for doubtful accounts
$ 680
Sales (all on account)
500,000
Sales returns
3,000
Aging Schedule of Accounts Receivable:
Age
Amount
% Uncollectible
0-30 days
$14,000
5%
30-60 days
20,000
8%
Over 60 days
12,000
12%
If Diane uses the aging schedule of accounts receivable to determine bad debts, what is the Allowance for Doubtful Accounts balance at December 31, 2010?
a. $3,000
b. $4,280
c. $2,920
d. $3,740
60.The following information was taken from the unadjusted trial balance and aging schedule of DianeCompany on December 31, 2010. All sales are on account.
Accounts and related balances at December 31, 2010 before adjustment:
Debit
Credit
Accounts receivable
$46,000
Allowance for doubtful accounts
$ 680
Sales (all on account)
500,000
Sales returns
3,000
Aging Schedule of Accounts Receivable:
Age
Amount
% Uncollectible
0-30 days
$14,000
5%
30-60 days
20,000
8%
Over 60 days
12,000
12%
If Diane uses the aging schedule of accounts receivable to determine bad debts, what is the net realizable value of accounts receivable on the 2010 financial statements?
a. $46,000
b. $42,260
c. $42,320
d. $30,400
61.The following information was taken from the unadjusted trial balance and aging schedule of Diane Company on December 31, 2010. All sales are on account.
Accounts and related balances at December 31, 2010 before adjustment:
Debit
Credit
Accounts receivable
$46,000
Allowance for doubtful accounts
$ 680
Sales (all on account)
500,000
Sales returns
3,000
Aging Schedule of Accounts Receivable:
Age
Amount
% Uncollectible
0-30 days
$14,000
5%
30-60 days
20,000
8%
Over 60 days
12,000
12%
If Diane Company estimates bad debts as 6% of net credit sales, what is the amount of bad debts expense to be reported on the income statement for the period ending December 31, 2010?
a. $27,019
b. $29,820
c. $30,000
d. $29,779
62.On December 1, 2010, Sedona Trading Co. sold goods to a German company for 25,000 German marks (25,000 DM) to be collected on January 12, 2011. The exchange rates on December 1 and December 31, 2010 are US$0.75 = 1 DM and US$.90 = 1 DM, respectively. What is Sedona’s revenue in U.S. dollars?
a. $18,750
b. $22,500
c. $3,750
d. $41,250
63.On December 1, 2010, Sedona Trading Co. sold goods to a German company for 25,000 German marks (25,000 DM) to be collected on January 12, 2011. The exchange rates on December 1 and December 31, 2010 are US$0.75 = 1 DM and US$.90 = 1 DM, respectively. What is Sedona’s exchange gain or loss for 2010?
a.$22,500 Exchange Gain
b. $3,750 Exchange Loss
c. $3,750 Exchange Gain
d. $18,750 Exchange Loss
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