ACCT 2010 Chapter 5 Questions and Correct Answers

Company held investments in trading securities with a fair value of $70,000 at December. These investments cost $60,000 in January. What is the amount to report on the balance sheet in December? $70,000 Trading securities with a fair value of $55,000 at December. These investments cost $45,000 on January. What should appear on the income statement for the year ended December? $10,000 unrealized gain A/R has a debit balance of $2,400 and the allowance of uncollectible accounts has a credit balance of $400. A $30 A/R is written off. What is the amount of net receivables after the write-off? $2,000 Company began with A/R of $525,000. Sales for the year totaled $1,400,000. Company ended the year with A/R of $700,000. Company's bad debt losses are minimal. How much cash did they collect from customers? $1,225,000 Company received a four month 6%, $3,000 not receivable on March 1. The adjusting entry on March 31 would include... a credit to interest revenue for $15 What is the maturity value of $70,000, 12%, 6 month note? $74,200 If the adjusting entry to accuse interest on a note receivable is omitted then... assets, net income and stockholder's equity are understated Net sales total $438,000. Beginning and ending accounts receivable are $35,000 and $37,000. Calculate day's sales in receivables. 30 days Bank paid $750,000 for trading securities in December. Bank received $40,000 cash dividend two weeks later. December 31st trading securities were quoted at a market price of $758,000. Income statement would include... unrealized gain of $8,000 Bank paid $750,000 for trading securities in December. Bank received $37,000 cash dividend two weeks later. December 31st trading securities were quoted at a market price of $757,000. Balance sheet would include... investment in trading securities of $757,000