Question :
157. Stanley, Inc.’s 2009 income statement reported net sales of $6,000,000, : 1229760
157. Stanley, Inc.’s 2009 income statement reported net sales of $6,000,000, uncollectible accounts expense of $160,000, and net income of $700,000. Stanley’s average accounts receivable during 2009 amounted to $1,200,000. Using 360 days to a year, Stanley’s
A. Accounts receivable turnover rate is approximately 4.4 times.
B. Accounts receivable turnover rate is approximately 2.5 times.
C. Average number of days to collect an account receivable is 72 days.
D. Accounts receivable turnover rate is approximately 2 times.
158. Assuming a 365 day year, Gore Industries calculated an average of 53 days to collect its accounts receivable in 2007. During 2007, Gore’s accounts receivable turnover rate:
A. Was approximately 6.89.
B. Was equal to 53 times its average accounts receivable.
C. Was approximately 0.15.
D. Can’t be determined from this information alone.
159. Varsity Corporation sold available-for-sale marketable securities costing $800,000 for $860,000 cash. This transaction is reported in Varsity’s income statement and statement of cash flows, respectively, as:
A. A $60,000 gain and a $60,000 cash receipt.
B. A $860,000 gain and a $60,000 cash receipt.
C. A $60,000 gain and a $860,000 cash receipt.
D. A $860,000 gain and a $860,000 cash receipt.
160. Fisher Corporation invested $320,000 cash in available-for-sale marketable securities in early December. On December 31, the quoted market price for these securities is $337,000. Which of the following statements is correct?
A. Fisher’s December income statement includes a $17,000 gain on investments.
B. If Fisher sells these investments on January 2 for $300,000, it will report a loss of $37,000.
C. Fisher’s December 31 balance sheet reports marketable securities at $320,000 and an unrealized holding gain on investments of $17,000.
D. Fisher’s December 31 balance sheet reports marketable securities at $337,000 and an unrealized holding gain on investments of $17,000.
On October 12, 2010, Neptune Corporation invested $700,000 in short-term available-for-sale marketable securities. The market value of this investment was $730,000 at December 31, 2010, but had slipped to $725,000 by December 31, 2011.
161. In financial statements prepared on December 31, 2010, Neptune Corporation reports:
A. The asset Investments in Marketable Securities at $700,000 with footnote disclosure of the market value of $730,000.
B. The asset Investments in Marketable Securities at $730,000, and a $30,000 Unrealized Holding Gain included in total stockholders’ equity.
C. The asset Investments in Marketable Securities at $730,000, and a $30,000 gain recognized in the income statement.
D. The asset Investments in Marketable Securities at $700,000, and a $30,000 Unrealized Holding Gain included in total stockholders’ equity.
162. Assuming Neptune does not sell this investment, the mark-to-market adjustment necessary at December 31, 2011, includes:
A. A $5,000 debit to Unrealized Holding Gain on Investments.
B. A $25,000 credit to Unrealized Holding Gain on Investments.
C. A $5,000 debit to Investments in Marketable Securities.
D. A $725,000 debit to Investments in Marketable Securities.
163. Assuming Neptune does not sell this investment, the financial statements prepared at December 31, 2011 will report:
A. Investments in Marketable Securities of $700,000, reduced by a $30,000 Unrealized Holding Gain on Investments, in the asset section of the balance sheet.
B. The asset Investments in Marketable Securities of $700,000 in the balance sheet, and a $25,000 Unrealized Holding Loss on Investments in the income statement.
C. The asset Investments in Marketable Securities of $725,000, and a $5,000 Unrealized Holding Loss deducted from total stockholders’ equity.
D. Investment in Marketable Securities of $725,000 in the asset section of the balance sheet, with a $25,000 Unrealized Holding Gain on Investments included in the stockholders’ equity section.
164. If a 15%, 60-day note receivable is acquired from a customer in settlement of an existing account receivable of $5,000, the accounting entry for acquisition of the note will:
A. Include a debit to Notes Receivable for $5,750.
B. Include a debit to Notes Receivable for $5,062.50.
C. Include a credit to Interest Revenue for $62.50.
D. Include a debit to Notes Receivable for $5,000 and no entry for interest.
165. Gold Company received a 60-day, 12% note for $8,000 on June 16. Which of the following statements is true?
A. Gold will receive $8,000 plus interest of $960 at maturity.
B. Gold should record a total receivable due of $8,080 on June 16.
C. The principal of the note plus interest is due on August 15.
D. The maturity value of this note is $8,000.
166. On November 1, Willis Corporation sold merchandise in return for a 6%, 90-day note receivable in the amount of $60,000. The proper adjusting entry at December 31 (end of Willis’s fiscal year) includes a:
A. Credit to Interest Revenue of $600.
B. Debit to Cash of $600.
C. Debit to Interest Receivable of $300.
D. Credit to Notes Receivable of $900.
