Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 7SE
1.
To determine
Compute
2.
To determine
Compute quick ratio for the year 2018.
3.
To determine
Compute cash conversion cycle for the year 2018.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Learning Objective 6: Account for notes receivable)1. Compute the amount of interest during 2018, 2019, and 2020 for the following notereceivable: On May 31, 2018, Wyoming State Bank loaned $240,000 to Lindsey Weston ona two-year, 8% note.2. Which party has a/ana. note receivable?b. note payable?c. interest revenue?d. interest expense?3. How much in total would Wyoming State Bank collect if Lindsey Weston paid off the noteearly on November 30, 2018?
(Learning Objective 5: Apply GAAP for uncollectible receivables) AtDecember 31, 2018, Concord Travel Agency has an Accounts Receivable balance of $87,000.Allowance for Uncollectible Accounts has a credit balance of $880 before the year-end adjustment. Service revenue (all on account) for 2018 was $800,000. Concord estimates that itsuncollectible-account expense for the year is 3% of service revenue. Make the year-end entryto record uncollectible-account expense. Show how Accounts Receivable and Allowance forUncollectible Accounts are reported on the balance sheet at December 31, 2018
(Learning Objectives 4, 5: Account for accounts receivable and uncollectibleaccounts) Perform the following accounting for the receivables of Hawkins and Harris, a CPAfirm, at December 31, 2018.Requirements1. Set up T-accounts and start with the beginning balances for these T-accounts:■ Accounts Receivable, $104,000■ Allowance for Uncollectible Accounts, $12,000Post the following 2018 transactions to the T-accounts:a. Service revenue of $695,000, all on accountb. Collections on account, $720,000c. Write-offs of uncollectible accounts, $8,000d. Uncollectible-account expense (allowance method), $15,0002. What are the ending balances of Accounts Receivable and Allowance for UncollectibleAccounts?3. Show how Hawkins and Harris will report accounts receivable on its balance sheet atDecember 31, 2018.
Chapter 12 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 12 - Prob. 1DQCh. 12 - Which amount is the base amount for vertical...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - How would you expect a recession to affect asset...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1SCCh. 12 - Prob. 2SCCh. 12 - Prob. 3SCCh. 12 - Prob. 4SCCh. 12 - Prob. 5SCCh. 12 - Prob. 6SCCh. 12 - Prob. 7SCCh. 12 - Prob. 8SCCh. 12 - Prob. 9SCCh. 12 - Prob. 10SCCh. 12 - Prob. 11SCCh. 12 - Prob. 12SCCh. 12 - Prob. 1SECh. 12 - Prob. 2SECh. 12 - Prob. 3SECh. 12 - Prob. 4SECh. 12 - Prob. 5SECh. 12 - Prob. 6SECh. 12 - Prob. 7SECh. 12 - Prob. 8SECh. 12 - Prob. 9SECh. 12 - Prob. 10SECh. 12 - Horizontal analysis(Learning Objective 2)15-20 min...Ch. 12 - Prob. 12AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 14AECh. 12 - Prob. 15AECh. 12 - Prob. 16AECh. 12 - Prob. 17AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 26BECh. 12 - Prob. 27BECh. 12 - Prob. 28BECh. 12 - Prob. 29BECh. 12 - Prob. 30BECh. 12 - Trend percentages and return on assets (Learning...Ch. 12 - Common-size financial statements and profitability...Ch. 12 - Current ratio, debt ratio, EPS (Learning Objective...Ch. 12 - Calculating various ratios for analysis (Learning...Ch. 12 - Prob. 35APCh. 12 - Prob. 36APCh. 12 - Trend percentages and return on assets (Learning...Ch. 12 - Common-size financial statements and profitability...Ch. 12 - Prob. 39BPCh. 12 - Calculating various ratios for analysis(Learning...Ch. 12 - Calculating various ratios for analysis (Learning...Ch. 12 - Prob. 42BPCh. 12 - Prob. 1CECh. 12 - Prob. 1CPCh. 12 - Prob. 1EIACh. 12 - Prob. 2EIACh. 12 - Prob. 1FACh. 12 - Industry Analysis Purpose: To help you understand...Ch. 12 - Prob. 1SBACh. 12 - Prob. 1WC
Knowledge Booster
Similar questions
- Most Essential Learning Competencies 1. Identify the elements of the SFP and describe each of them. 2. Prepare an SFP using the report form and the account form with proper classification of items as current and noncurrent. STATEMENT OF FINANCIAL Part 1: At the back of this paper, prepare a Statement of Financial Position pf CDS Enterprise Business for the calendar year 2020 using the following accounts in Report Form: Cash - 5,000 Loans Payable - 77,500 Accounts Receivable - 2,600 Supplies - 2,300 Equipment - 17,000 Owner's equity – 40,000 Accounts Payable - 22,400 Building - 113,000 Part 2: Answer the following questions and write the solutions in a clean paper. Attached your solution with this paper. 1. If assets are Php17,000 and owner's equity is Php10,000, liabilities are 2. At the end of the first month of operations for Juana's Delivery Service, the business had the following accounts: Accounts Receivable, Php1,200; Prepaid Insurance, Php500; Equipment, Php36,200 and Cash,…arrow_forward(Learning Objectives 4, 5: Account for accounts receivable and uncollectibleaccounts) Perform the following accounting for the receivables of Andrews and Johnson, a lawfirm, at December 31, 2018.Requirements1. Set up T-accounts and start with the beginning balances for these T-accounts:■ Accounts Receivable, $100,000■ Allowance for Uncollectible Accounts, $14,000Post the following 2018 transactions to the T-accounts:a. Service revenue of $697,000, all on accountb. Collections on account, $714,000c. Write-offs of uncollectible accounts, $8,000d. Uncollectible-account expense (allowance method), $11,0002. What are the ending balances of Accounts Receivable and Allowance for UncollectibleAccounts?3. Show how Andrews and Johnson will report accounts receivable on its balance sheet atDecember 31, 2018.arrow_forward(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity using ratios) The comparative financial statements of Diamond Pools, Inc.,for 2020, 2019, and 2018 included the following select data:Balance sheetCurrent assets:Cash...............................................Investment in trading securities......Receivables, net of allowancefor uncollectible accounts of $7,$6, and $4, respectivelyInventories .....................................Prepaid expenses............................Total current assets........................Total current liabilities.......................Income statementNet sales (all on account)...................(In millions)2020$ 9015027034050$ 900$ 550$7,7002019$ 9518028035540$ 950$ 640$5,3552018$ 6011523032535$ 765$ 650$4,745Requirements1. Compute the following ratios for 2020 and 2019:a. Current ratiob. Quick (acid-test) ratioc. Days’ sales outstanding2. Which ratios improved from 2019 to 2020 and which ratios deteriorated?…arrow_forward
- (Learning Objective 5: Apply GAAP for uncollectible receivables) The September 30,2019, records of West Point Communications include these accounts:Accounts Receivable.................................... $249,000Allowance for Doubtful Accounts............... (8,000)During the year, West Point Communications estimates Uncollectible-account expense at 1%of credit sales. At year-end (December 31), the company ages its receivables and adjusts thebalance in Allowance for Uncollectible Accounts to correspond to the following aging schedule:LO 5Age of Accounts1–30 Days 31–60 Days 61–90 Days Over 90 Days$132,000 $52,000 $15,000 $36,000Accounts Receivable$235,000Estimated percent uncollectible 0.5% 2% 15% 35%During the last quarter of 2019, the company completed the following selected transactions:Nov 30 Wrote o as uncollectible the $1,200 account receivable fromLooper Carpets and the $800 account receivable from Williams Antiques.Dec 31 Adjusted the Allowance for Uncollectible Accounts and…arrow_forwardAt a rate of 5.5%, what is the present value of the following cash flow stream? Years 1. 2 3 Cash Flows $0 $750 $600 $500 $400 Show your work in Excel and highlight your answer to this question. Your excel file will be submitted at the end of the exam.arrow_forwardE-F:8-14 Defining common receivables terms (Learning Objective 1) Match the terms with their correct definition. Terms 1. Accounts receivable 2. Other receivables 3. Debtor 4. Notes receivable 5. Maturity date 6. Creditor Definitions a. The party to a credit transaction who takes on an obligation/payable. b. The party who receives a receivable and will collect cash in the future.. c. A written promise to pay a specified amount of money at a particular future date. d. The date when the note receivable is due. e. A miscellaneous category that includes any other type of receivable where there is a right to receive cash in the future. f. The right to receive cash in the future from customers for goods sold or for services performed.arrow_forward
- (Learning Objective 7: Calculate return on assets) Hometown Supply Companyreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$84,000$ 4,200$70,000$82,600$ 4,050$69,450Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forwardThis fourth, and final, project for the semester will involve the following items to turn in: 1) A statement of cash flows from information I will provide you. You can turn in the information in excel, best choice, word or hand written and scanned. All files need to be uploaded to this assignment.arrow_forward(Learning Objective 1: Show how to speed up cash from receivables) Patterson ShirtCompany sells on credit and manages its own receivables. Average experience for the past threeyears has been the following:Sales..................................................Cost of goods sold.............................Uncollectible-account expense...........Other expenses..................................Cash$250,000125,000—82,500Credit$250,000125,00018,00082,500Total$500,000250,00018,000165,000The owner of Patterson is considering whether to accept credit cards (VISA and MasterCard)instead of granting credit to customers. If Patterson were to accept credit cards, the ownerexpects total sales to increase by 10% but cash sales to remain unchanged. Further, if Pattersonwere to accept credit cards, the business can save $9,000 on other expenses, but the credit cardprocessors charge 3% on credit card sales.Requirement1. Should Patterson Shirt Company start accepting credit cards? Show the computations…arrow_forward
- Year 0 1 3 4 5 6 -Assuming an interest rate of 5%, which three cash flows have the best Net Present Value? (Remember to show your work!): Estimated Response Time for Average Student: 2 minutes) a. Cash Flows C, D, and F b. Cash Flows A, E, and D c. Cash Flows D, E, and F d. Cash Flows D, F, and G e. Cash Flows D, E, and G -Assuming an interest rate of 5%, which three cash flows have the best Equivalent Uniform Annual Worth (EU AW)? (Remember to show your work!): (Estimased Response Time for Average Student: 2 minutes) a. Cash Flows A, D, and G b. Cash Flows C, D, and E c. Cash Flows B, C, and F d. Cash Flows E, F, and G e. Cash Flows C, E, and F B A ($75,000) $75,000) $15,000 $0 $15,000 $0 $15,000 $15,000 $15,000 C ($75,000) D $75,000) $0 $50,000 $0 $25,000 $27,000 $10,000 $15,000 $54,000 $5,000 $105,000 $0 $0 E ($75,000) $5,000 $5,000 $5,000 $5,000 $72,500 $2,500 I F 00) $37,750 $5,000 $0 $0 $5,000 $37,750 G ($75,000) $0 $52,750 $27,750 $0 $0 $10,000arrow_forward(Learning Objective 7: Calculate return on assets) Handley Grocery Corporationreported the following information in its comparative financial statements for the fiscal yearended January 31, 2018:January 31,2018January 31,2017Net sales....................................Net earnings..............................Average total assets...................$50,000$ 2,200$40,000$48,350$ 2,100$39,300Requirements1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did itimprove or worsen in 2018?2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve orworsen in 2018?3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improveor worsen in 2018? Which component—net profit margin ratio or asset turnover—wasmostly responsible for the change in the company’s return on assets?arrow_forwardLearning Objective 7: Calculate return on assets) In 2018, Ambrosia Corporation LO 7reported $100 million in sales, $18 million in net income, and average total assets of $200 million.What is Ambrosia’s return on assets in 2018?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,