Question 7 of 34 In Step 1, a company orders $200 of Inventory "on credit," without paying for any of it in cash. In Step 2, it turns this Inventory into finished products and sells and delivers it to customers for $400 in sales. However, the customers do not pay upfront in cash, so the company cannot pay its suppliers for this Inventory yet. Finally, in Step 3, the company collects the $400 in owed cash and pays its suppliers. Explain how the company's Cash balance changes in Steps 1-2 (combined) and then in Steps 1-3 (combined). A B с D Cash is down by $250 in the first two steps; over all three steps, it's up by $150. Cash is down by $150 in the first two steps; over all three steps, it's up by $75. Cash is down by $50 in the first two steps; over all three steps, it's up by $150. Cash is up by $350 in the first two steps; over all three steps, it's up by $150.

Question 7 of 34 In Step 1, a company orders $200 of Inventory "on credit," without paying for any of it in cash. In Step 2, it turns this Inventory into finished products and sells and delivers it to customers for $400 in sales. However, the customers do not pay upfront in cash, so the company cannot pay its suppliers for this Inventory yet. Finally, in Step 3, the company collects the $400 in owed cash and pays its suppliers. Explain how the company's Cash balance changes in Steps 1-2 (combined) and then in Steps 1-3 (combined). A B с D Cash is down by $250 in the first two steps; over all three steps, it's up by $150. Cash is down by $150 in the first two steps; over all three steps, it's up by $75. Cash is down by $50 in the first two steps; over all three steps, it's up by $150. Cash is up by $350 in the first two steps; over all three steps, it's up by $150.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Control over Cash Disbursements All cash disbursements should be made by check/debit card/credit card. 1. 2. Expenditures should be authorized before purchase and accuracy of purchase should be verified. The person who authorizes should not prepare the check. Use serial numbered checks. Only authorized person(s) should sign the check. Debit/Credit card statements should be checked against 3. 4. purchase receipts. The person verifying the statements should not be the person who made the purchases. Set limits on purchases for credit/debit cards. Separate the duties of the person responsible for making cash disbursements from the person in charge of cash receipts. 5. 6. Company Cash Receipts Recording revenue: the company always recognizes revenue at the agreed upon price. The amount of revenue recognized is not impacted by the way the customer pays for the good or service. Example: Tim purchases $100 of groceries from Publix. Below are two examples, one where Tim pays with either…
13. Paid Hoagie Co. for invoice of October 3. 14. Paid Taco Co. for invoice of October 4, less debit memo of October 6. 19. Purchased merchandise from Veggie Co., $27,300, terms FOB shipping point, n/com. 19. Paid freight of $400 on October 19 purchase from Veggie Co. 20. Purchased merchandise from Caesar Salad Co., $22,000, terms FOB destination, 1/10, n/30. 30. Paid Caesar Salad Co. for invoice of October 20. 31. Paid UK Imports Co. for invoice of October 1. 31. Paid Veggie Co. for invoice of October 19. Instructions Journalize the entries to record the transactions of Capers Company for October. PR 6-2A Sales-related transactions using perpetual inventory system OBJ. 2 The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers: Mar. 2. Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,300. 3. Sold…
QUESTION 28 An aging of a company's accounts receivable indicates that $5,000 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record bad debts for the period will require a debit to Allowance for Doubtful Accounts for $4, 100. credit to Allowance for Doubtful Accounts for $5,000. debit to Bad Debt Expense for $4,100. debit to Bad Debt Expense for $5,000. QUESTION 29
E 7-8 Sales returns ⒸLO7-4 Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $300,000. During 2024, Halifax sold merchandise on account for $11,500,000. Halifax's merchandise costs are 65% of merchandise selling price. Also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during 2024. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at…
Question 28 The sum of customers' unpaid balances that is compared to the general ledger comes from: the total of sales invoices a total of shipping orders the sales journal the accounts receivable trial balance
QUESTION 5 Duncan Corporation uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 2% uncollectible rate. Accounts more than 60 days are considered old and have a 34% uncollectible rate. Duncan's Allowance for doubtful accounts currently has an unadjusted credit balance of $2,500. If Duncan has $68,400 of young accounts and $14,200 of old accounts, how much should be reported in the adjusted Allowance for doubtful accounts?
nal summ طم معلومات محاسبية نظري The revenue cycle consists of Select one: out of a. one subsystem-order entry b. two subsystems-sales order processing and cash receipts ag question C. two subsystems-order entry and inventory control O d. three subsystems-sales order processing, credit authorization, and cash receipts Previous page Jump to.. General
Problem 1: The company sells a 2/10, n/30 basis. Internet control quite weak, so the senior accountant in charge of the examination of the company's financial statements asked you to make a careful review of the Cash Receipts Book for the month of July, 2020, which is reproduced below. You are asked to compute the cash short or over. Cash Receipts Cash Accounts Date Account Cash P 784 588 Item Sales Discount Receivable 7/5 7/10 Carrie Bart 6/24 invoice P 16 800 6/30 invoice 12 600 7/11 Cash Sales 25 25 7/12 Bart 7/13 Cash Sales 7/14 Antonio 7/15 Cash Sales 7/16 Bart 7/18 Cash Sales 7/20 Carrie 7/20 Cash Sales 7/27 Bart 7/1 invoice 294 6. 300 32 32 713 invoice 877 23 900 38 38 7/1 686 14 700 30 30 7/9 invoice 578 12 600 27 27 7/16 invoice 490 10 500 P 4,439 P 142 103 P 4,400
E8B. ACCOUNTING CONNECTION Developing a convenient means of reimbursing sales representatives with cash for their incidental expenses, such as for meals and supplies, is a problem many companies face. Under one company's plan, the sales representatives submit the receipts for reimbursement to the petty cash custodian. The representative then receives cash from the petty cash fund. What is the weak point in this system? What fundamental principle of internal con- trol is being ignored? What improvement in the procedure can you suggest?
PARRISH 7-1 THIRD TIME ASKING QUESTION!!!!! (This is not too complex!) The answers I need is how the following transactions are recording in the Periodic Method and the Perpetual Method. Please provide the answers and explain if you can why the transactions were recorded the way they were and why the accounts used in your answer were chosen. New Sales Company has just gone into business and is starting to receive inventory items it has ordered. The problem facing New Sales is that no one knows whether the system to use should be the periodic or perpetual system. a) Record each of the following transactions using the periodic method 5/6 Purchased $5000 of goods on account. The freight charges on the goods were $50. Goods costing $35 were damaged and were returned to the seller; the seller reduced the amount owed by $35 5/9 New Sales found that items costing $95 were not ordered and could not be used. New Sales returned the items, and the supplier reduced the amount owed. 5/26 Paid…
Question 18 Riggy Company provided you with the unadjusted selected accounts on December 31, 200E. P 850,000 50.000 P S00.000 Sales Less: Sales renurns Net Sales P 74,000 12,000 P 62,000 Accounts Receivable Less: Allow, for bad debts Net Realazable value Beginning inventory Ending inventory P45,000 60,000 Freight in Freight out 12,000 20,000 If bad debts are estimated to be 2% of Sales, how much would be debited to bad debts? P4,000 P 17,000 P 16,000 P5,000
WalCo TarMart CostGet Beginning Accounts Receivable $ 1,745 5,816 559 Required: 1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet. 2. Which company appears most efficient in collecting cash from sales? Required 1 Required 2 WalCo TarMart CostGet Complete this question by entering your answers in the tabs below. WalCo TarMart Ending Accounts Receivable $ 2,692 6,344 - 595 Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet. Note: Rounded to one decimal place. Enter your dollar answers in millions. Net Sales $ 315,427- 60,878 61,963 Choose Numerator Choose Numerator Receivables Turnover Ratio Choose Denominator Average Collection Period Choose Denominator < Prev 8 of 8 = Receivables turnover ratio times times times + = Average collection period Next days days