Reference no: EM132669326
Questions -
Q1) A company has net credit sales of $1,400,000, beginning net accounts receivable of $300,000, and ending net accounts receivable of $200,000. What is the days' sales in accounts receivable?
Q2) Wellington Clothing Store reported the following selected items at June 30, 2019 (previous year - 2018 - amounts are also given as needed):
Cash $80,000
Accounts Receivable, net:
June 30, 2019 45,000
June 30, 2018 53,000
Accounts Payable 55,000
Cost of Goods Sold 288,000
Merchandise Inventory
June 30, 2019 70,000
June 30, 2018 90,000
Net Credit Sales Revenue 480,000
Long-Term Assets 220,000
Long-Term Liabilities 140,000
Other Current Assets 150,000
Other Current Liabilities 130,000
Short-term Investments 40,000
Compute Wellington's acid-test ratio on June 30, 2019. Show your computations.
Q3) Which of the following is included in the numerator of the acid-test ratio?
A) cash including cash equivalents, inventory, short-term investments, net current receivables
B) accounts receivable and inventory
C) cash including cash equivalents, short-term investments, net current receivables
D) total current assets
Q4) A company's liquidity can be evaluated using all of the following ratios EXCEPT ________.
A) Return on assets ratio
B) Acid-test ratio
C) Accounts receivable turnover
D) Days' sales in receivables
Q5) Provide a brief definition of each of the following terms.
Term Brief Definition
Debtor
Pledging Receivables Accounts Receivable
Q6) A business maintains subsidiary accounts for each of its customers. On April 7, the business provides $2,500 in services to Anne Hill on account. The business sells $4,000 (sales price) of merchandise inventory to Ron Wilson on account. The full amount was collected from each customer on April 26. Prepare the journal entries for April 7 and April 26. Ignore Cost of Goods Sold and omit explanations.
Q7) Alltech Company maintains a separate accounts receivable account for each customer. On June 18, Alltech provides $6100 of services on account to customer Anthony and $1000 of services on account to customer Walker. How will these two transactions affect the control and subsidiary accounts?
A) The control account, Accounts Receivable, will be increased with a debit of $7100.
B) The individual customer accounts in the subsidiary ledger will be increased with credits.
C) After posting these transactions, the sum of the balances in subsidiary accounts receivable will not equal the control account balance.
D) The control account will have a debit balance and the subsidiary accounts will have a credit balance. This keeps the accounting equation in balance.
Q8) Which of the following is included in the cost of land?
A) cost of fencing
B) cost of paving
C) brokerage commission
D) cost of outdoor lighting