ACCTG 26 MIDTERM EXAM

Riri Company provided the following information for the current year:

Account Receivable on January 1 1,300,000

Credit Sales 5,300,000

Collection from customers, excluding recovery 4,750,000

Accounts written off 125,000

Collection of accounts written off in prior year (customer credit was not established) 25,000

Estimated uncollectible receivables per aging of receivables at December 31 165,000

What is the balance of accounts receivable, before allowance for doubtful accounts on December 31?

• 1,725,000

• 1,850,000

• 1,950,000

• 1,990,000

Jojo Company provided the following data for the current year:

Accounts Receivable, January 1 650,000

Credit Sales 2,700,000

Sales Returns 75,000

Accounts written off 40,000

Collections from customers 2,150,000

Estimated future sales returns at December 31 50,000

Estimated uncollectible accounts at 12/31 per aging 110,000

What is the cost of accounts receivable on December 31?

• 1,200,000

• 1,125,000

• 1,085,000

• 925,000

Mai2 Company reported the following information at year-end:

Trade accounts receivable 930,000

Allowance for doubtful accounts (40,000)

Claim against the shipper for goods lost in transit in November 80,000

Selling price of unsold goods sent by Mai2 on consignment at 130% of the cost and not included in Mai2’s ending inventory 260,000

Security deposit on the lease of warehouse used for storing some inventories 300,000

What amount should be reported as trade and other receivables under current assets at year-end?

• 970,000

• 1,200,000

• 1,240,000

• 1,500,000

Famela Company provided the following information relating to current operations:

Accounts Receivable, January 1 2,000,000

Accounts Receivable collected 10,400,000

Cash sales 2,000,000

Inventory, January 1 3,800,000

Inventory, December 31 3,600,000

Purchases 8,000,000

Gross Margin on Sales 4,200,000

What amount should be reported as accounts receivable on December 31?

• 8,200,000

• 6,200,000

• 2,000,000

• 4,200,000

Seven Company provided the following information during the first year of operations:

Total merchandise purchases for the year 6,000,000

Merchandise in inventory on December 31 1,200,000

Collections from customers 4,000,000

All merchandise was marked to sell at 50% above cost. All sales are on credit basis and all receivables are collectible. What amount should be reported as accounts receivables on December 31?

• 1,000,000

• 3,840,000

• 5,000,000

• 3,200,000

Gemini Company started business at the beginning of the current year. The entity established an allowance for doubtful accounts estimated at 5% of credit sales. During the year, the entity wrote off P 50,000 of uncollectible accounts. Further analysis showed that merchandise purchased amounted to P 9,000,000 and ending merchandise inventory was P 1,500,000. Goods were sold at 50% above cost. The total sales comprised 80% sales on account and 20% cash sales. Total collections from customers, excluding cash sales, amounted to P 6,000,000. What is the amount of sales on account?

• 10,500,000

• 9,000,000

• 12,000,000

• 8,400,000

1. Gemini Company started business at the beginning of the current year. The entity established an allowance for doubtful accounts estimated at 5% of credit sales. During the year, the entity wrote off P 50,000 of uncollectible accounts. Further analysis showed that merchandise purchased amounted to P 9,000,000 and ending merchandise inventory was P 1,500,000. Goods were sold at 50% above cost. The total sales comprised 80% sales on account and 20% cash sales. Total collections from customers, excluding cash sales, amounted to P 6,000,000. What is the net realizable value of accounts receivable at year-end?

• 1,980,000

• 1,930,000

• 2,580,000

• 2,400,000

Rain Company used the allowance method of accounting for uncollectible accounts. During the current year, the entity charged P 700,000 to bad debt expense and wrote off accounts receivable of P 900,000 as uncollectible. What was the decrease in working capital?

• 900,000

• 700,000

• 100,000

• 0

Oracle Company prepared an aging of accounts receivable on December 31 and determined that the net realizable value of the accounts receivable was P 2,500,000.

Allowance for doubtful accounts on January 1 380,000

Accounts written off as uncollectible 330,000

Accounts receivable on December 31 2,800,000

Uncollectible accounts recovery 50,000

What amount should be recognized as doubtful accounts expense for the current year?

• 230,000

• 200,000

• 150,000

• 100,000

Master Company provided the following accounts abstracted from the unadjusted trial balance at year-end:

Accounts Receivable 5,000,000 debit

Allowance for doubtful accounts 40,000 debit

Net credit sales 20,00,000 credit

The entity estimated that 3% of the gross accounts receivable will become uncollectible. What amount should be recognized as the ending balance of allowance for doubtful accounts for the current year?

• 110,000

• 150,000

• 190,000

• 600,000