Reference no: EM132605002
Question - Cordova, Inc., reported the following receivables in its December 31, 2017, year-end balance sheet:
Current assets: Accounts receivable, net of $43,000 in allowance for uncollectible accounts $375,000 Interest receivable 16,850 Notes receivable 320,000
Additional information:
1. The notes receivable account consists of two notes, a $110,000 note and a $210,000 note. The $110,000 note is dated October 31, 2017, with principal and interest payable on October 31, 2018. The $210,000 note is dated March 31, 2017, with principal and 10% interest payable on March 31, 2018.
2. During 2018, sales revenue totaled $2,030,000, $1,890,000 cash was collected from customers, and $32,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 9% of year-end gross accounts receivable.
Required -
1. In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Cordova's 2018 income statement?
2. Calculate the receivables turnover ratio for 2018.
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