Reference no: EM132830065

Problem 1: Espat Corp. reported net sales (all on credit) of $1,600,000 and cost of goods sold of $1,100,000 for 2016. Its beginning balance of Accounts Receivable was $150,000. The accounts receivable balance decreased by $10,000 during 2016. Rounded to two decimal places, what is Espat's accounts receivable turnover rate for 2016?

a. 7.59

b. 10.32

c. 10.67

d. 11.03

Problem 2: On July 1, 2016, Falcon Company received a $20,000 promissory note for services from Jordyn Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2017. The effect on Falcon's financial statements on July 1, 2016 is as follows

a. Assets increase; owners' equity increases

b. Assets decrease and owners' equity decreases

c. Assets decrease

d. No net change in assets