The financial statements of Wines, Inc., provide the following information for the current year:

	Dec.31	Jan.1
Accounts receivable......................................................................	$210,000	$180,000
Inventory......................................................................	200,000	190,000
Prepaid expenses.......................................................................	14,000	10,000
Accounts payable (for merchandise).................................................................	176,000	161,000
Accrued expenses payable.........................................................................	13,000	19,000
Net sales..............................................................................	2,900,000
Cost of goods sold...............................................................................	1,500,000
Operating expenses (including depreciation of $40,000)......................................................................................	300,000

53. Refer to the above data. Compute the amount of cash received from customers during the current year.

A) $2,900,000.

B) $2,690,000.

C) $2,870,000.

D) Some other amount.

54. Refer to the above data. Compute the amount of Wine's cash payments for purchases of merchandise during the current year.

A) $1,500,000.

B) $1,495,000.

C) $1,505,000.

D) Some other amount.

55. Refer to the above data. Compute the amount of Wine's cash payments for operating expenses.

A) $260,000.

B) $270,000.

C) $250,000.

D) Some other amount.

56. Refer to the above data. Wine's net cash flow from operating activities for the current year is:

A) $1,105,000.

B) $1,375,000.

C) $1,495,000.

D) Some other amount.

57. Alpine Company reported an increase of $190,000 in its accounts receivable during the year 2005. The company's statement of cash flows for 2005 reported $1 million of cash received from customers. What amount of net sales must Alpine have recorded in 2005?

A) $ 810,000.

B) $1,190,000.

C) $1,000,000.

D) $ 190,000

58. When there is an allowance for doubtful accounts in use, the writing-off of an uncollectible accounts receivable will:

A) Reduce income.

B) Reduce an expense.

C) Not change income nor total assets.

D) Increase total assets.

59. The aging of the accounts receivable approach to estimating uncollectible accounts does not:

A) Take into consideration the existing balance in the Allowance for Doubtful Accounts.

B) Utilize a percentage of probable uncollectible accounts for each age group of accounts receivable.

C) Stress the relationship between uncollectible accounts expense and net sales.

D) Tend to give a reliable estimate of uncollectible accounts because of the consideration given to the collectability of specific accounts receivable.

60. Juliet Inc. had accounts receivable of $300,000 and an allowance for doubtful accounts of $18,500 just before writing off as worthless an account receivable from Arrow Company of $1,200. The net realizable values of the accounts receivable before and after the write-off were:

A) $281,500 before and $280,300 after.

B) $281,500 before and $281,500 after.

C) $300,000 before and $298,800 after.

D) $318,500 before and $317,300 after.

61. Romeo Inc. had accounts receivable of $250,000 and an allowance for doubtful accounts of $9,700 just before writing off as worthless an account receivable from Juliet Company of $1,500. After writing off this receivable what would be the balance in Romeo's Allowance for Doubtful Accounts?

A) $9,700 credit balance.

B) $10,900 credit balance.

C) $8,200 credit balance.

D) $8,200 debit balance.

62. Sandy Company uses the balance sheet approach in estimating uncollectible accounts expense. It has just completed an aging analysis of accounts receivable at December 31, 2006. This analysis disclosed the following information:

	Age	Percentage
	Group	Considered
	Total	Uncollectible
Not yet due	$51,000	1%
1-30 days past due	$29,000	2%
31-60 past due	$12,000	8%

What is the appropriate balance for Sandy's Allowance for Doubtful Accounts at December 31, 2006?

A) $92,000.

B) 2% of credit sales in 2006.

C) $1,540.

D) $2,050.

63. At the start of the current year, Utopia Corporation had a credit balance in the Allowance for Doubtful Accounts of $1,400. During the year, a monthly provision of 2% of sales was made for uncollectible accounts. Sales for the year were $300,000, and $5,200 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show:

A) Uncollectible accounts expense of $11,200.

B) Allowance for Doubtful Accounts with a credit balance of $2,200.

C) Allowance for Doubtful Accounts with a credit balance of $6,600.

D) Uncollectible accounts expense of $5,200.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below 53 B 2690000 Cash Received From Customers Net Sales Accounts Receivable at the beginning of the year Accounts Receivable at the end of the ... View the full answer