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Intermediate Accounting 8Th Edition Spiceland Test Bank Full Chapter PDF
Intermediate Accounting 8Th Edition Spiceland Test Bank Full Chapter PDF
Intermediate Accounting 8Th Edition Spiceland Test Bank Full Chapter PDF
True False
2. From a financial accounting perspective, the main purposes of a system of internal control
are to improve the accuracy and reliability of accounting information and to safeguard
assets.
True False
3. In a good system of internal control, the person who initiates a transaction should be allowed
to effectively control the processing of the transaction through its final inclusion in the
accounting records.
True False
True False
5. Under IFRS, an overdraft in a cash account at one bank can be offset against a positive
balance in the account at another bank for purposes of reporting cash on the company's
balance sheet.
True False
7-1
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6. The net method of accounting for cash discounts requires adjusting entries for discounts
taken.
True False
True False
8. If cash has been collected from a customer, recognizing estimated sales returns results in
recognizing a refund liability.
True False
9. The income statement approach to estimating bad debts requires an adjusting entry at the
end of the period to reduce receivables to net realizable value.
True False
10. Under IFRS, accounts receivable can be accounted for at fair value whenever company
management wants to do so.
True False
11. Under IFRS, accounts receivable can be accounted for as "available for sale" if that approach
is elected upon initial recognition of the receivable.
True False
12. Using the balance sheet approach, bad debt expense is an indirect result of estimating the
net realizable value of accounts receivable.
True False
7-2
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13. Discounts on notes receivable are recognized as interest earned over the term of the related
note.
True False
14. If a long-term noninterest-bearing note is received in exchange for merchandise sold, the
amount of sales revenue recognized will be greater than the amount of the note.
True False
15. Unless specific sales criteria are met, the factoring of accounts receivable with recourse is
accounted for as a loan.
True False
True False
17. Under IFRS, transfer of risks and rewards of ownership, rather than transfer of control, is the
primary factor determining whether a factored receivable can be treated as sold rather than
as part of a secured borrowing.
True False
18. The receivables turnover ratio provides a way for an analyst to assess the effectiveness of a
company in managing its investment in receivables.
True False
19. In a bank reconciliation, adjustments to the bank balance could include adding deposits in
transit and deducting bank service charges.
True False
7-3
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20. In a bank reconciliation, adjustments to the book balance could include adding or subtracting
company errors.
True False
21. The journal entry to record the replenishment of a petty cash fund includes a credit to the
petty cash fund.
True False
22. When a creditor's receivable becomes impaired, the receivable is revalued based on the
discounted present value of currently expected cash flows at the loan's original effective
rate.
True False
True False
24. Important elements of an internal control system for cash disbursements include each of the
following except:
7-4
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25. COSO defines internal control as a process, affected by an entity's board of directors,
management, and other personnel, designed to provide reasonable assurance regarding the
achievement of objectives in:
26. Cashmere Soap Corporation had the following items listed in its trial balance at 12/31/2016:
What amount will Cashmere Soap include in its year-end balance sheet as cash and cash
equivalents?
A. $9,450.
B. $12,450.
C. $7,450.
D. $19,650.
7-5
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28. Cash may not include:
A. Foreign currency.
B. Money orders.
C. Restricted cash.
D. Undeposited customer checks.
30. Cash that is restricted and not available for current operations is reported in the balance
sheet as:
A. Equity.
B. Investments.
C. Liabilities.
D. A separate section between liabilities and equity.
7-6
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31. Logistics Company had the following items listed in its trial balance at 12/31/2016:
Included in the checking account balance is $50,000 of restricted cash that Bank of the East
requires as a compensating balance for the $300,000 note. What amount will Logistics
include in its year-end balance sheet as cash and cash equivalents?
A. $412,000.
B. $462,000.
C. $392,000.
D. $442,000.
32. Which of the following is true about reporting cash under IFRS?
A. Cash accounts include loans made to customers, but not to related parties.
B. Overdrafts typically cannot be offset against positive balance in other cash accounts on
the balance sheet.
C. Cash overdrafts are not allowed.
D. Overdrafts typically are not shown as current liabilities on the balance sheet.
7-7
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33. Wilson Company had the following cash balance items listed in its trial balance at
12/31/2016:
If Wilson reports under IFRS, its 12/31/2016 balance sheet would show what cash balance?
A. ($5,000).
B. $55,000.
C. $60,000.
D. None of these answer choices are correct.
34. Wilson Company had the following cash balance items listed in its trial balance at
12/31/2016:
If Wilson reports under U.S. GAAP, its 12/31/2016 balance sheet would show what cash
balance?
A. ($5,000).
B. $55,000.
C. $60,000.
D. None these answer choices are correct.
7-8
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35. On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with
credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.
A. Accounts 7,840
receivable
Sales 7,840
B. Accounts 8,000
receivable
Sales 8,000
Sales 8,000
D. Accounts 8,000
receivable
Cash 160
discounts
Sales 7,840
7-9
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36. On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with
credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.
What is the correct entry for Flores on November 17, assuming the correct payment was
received on that date?
A. Cash 7,840
Accounts 7,840
receivable
B. Cash 7,840
Sales 160
discounts
Accounts 8,000
receivable
C. Cash 7,840
Sales 160
Accounts 8,000
receivable
D. Cash 8,000
Sales 160
discounts
Accounts 8,000
receivable
Sales 160
7-10
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37. On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with
credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.
What is the correct entry for Flores on December 5, assuming the correct payment was
received on that date?
A. Cash 8,000
Accounts 7,840
receivable
Discounts 160
revenue
B. Cash 8,000
Accounts 7,840
receivable
Interest 160
revenue
C. Cash 8,160
Accounts 8,000
receivable
Interest 160
revenue
D. Cash 8,00
Accounts 8,00
receivable
7-11
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38. Oswego Clay Pipe Company sold $46,000 of pipe to Southeast Water District #45 on April 12
of the current year with terms 1/15, n/60. Oswego uses the gross method of accounting for
cash discounts.
A. Accounts 46,000
receivable
Sales 46,000
B. Accounts 46,000
receivable
Sales 45,540
Sales 460
discounts
C. Accounts 45,540
receivable
Sales 45,540
D. Accounts 45,540
receivable
Sales 460
discounts
Sales 46,000
7-12
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39. Oswego Clay Pipe Company sold $46,000 of pipe to Southeast Water District #45 on April 12
of the current year with terms 1/15, n/60. Oswego uses the gross method of accounting for
cash discounts.
What entry would Oswego make on April 23, assuming the customer made the correct
payment on that date?
A. Cash 45,540
Sales 460
Accounts 46,000
receivable
B. Cash 46,000
Sales 460
discounts
Accounts 46,000
receivable
Interest 460
revenue
C. Cash 45,540
Sales 460
discounts
Accounts 46,000
receivable
D. Cash 46,000
Accounts 45,540
receivable
Sales 460
7-13
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40. Oswego Clay Pipe Company sold $46,000 of pipe to Southeast Water District #45 on April 12
of the current year with terms 1/15, n/60. Oswego uses the gross method of accounting for
cash discounts.
What entry would Oswego make on June 10, assuming the customer made the correct
payment on that date?
A. Cash 46,000
Accounts 45,540
receivable
Discounts 460
receivable
B. Cash 46,000
Accounts 45,540
receivable
Interest 460
revenue
C. Cash 46,000
Accounts 46,000
receivable
D. Cash 46,460
Accounts 46,000
receivable
7-14
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41. On November 10 of the current year, Cherokee Industries sold materials to a customer for
$8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash
discounts.
A. Accounts 7,840
receivable
Sales 7,840
B. Accounts 8,000
receivable
Sales 8,000
C. Accounts 7,840
receivable
Cash 160
discounts
Sales 8,000
D. Accounts 8,000
receivable
Cash 160
discounts
Sales 7,840
7-15
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42. On November 10 of the current year, Cherokee Industries sold materials to a customer for
$8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash
discounts.
What entry would Cherokee make on November 17, assuming the correct payment was
received on that date?
A. Cash 7,840
Accounts 7,840
receivable
B. Cash 7,840
Sales 160
discounts
Accounts 8,000
receivable
C. Cash 7,840
Sales 160
Accounts 8,000
receivable
D. Cash 8,000
Sales 160
discounts
Accounts 8,000
receivable
Sales 160
7-16
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43. On November 10 of the current year, Cherokee Industries sold materials to a customer for
$8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash
discounts.
What entry would Cherokee make on December 10, assuming the correct payment was
received on that date?
A. Cash 8,000
Accounts 7,840
receivable
Discounts 160
revenue
B. Cash 8,000
Accounts 7,840
receivable
Interest 160
revenue
C. Cash 8,160
Accounts 8,000
receivable
Interest 160
revenue
D. Cash 8,000
Accounts 8,000
receivable
7-17
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44. Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of
the current year, with terms 1/15, n/60. Harvey uses the net method of accounting for cash
discounts.
A. Accounts 46,000
receivable
Sales 46,000
B. Accounts 46,000
receivable
Sales 45,540
Sales 460
discounts
C. Accounts 45,540
receivable
Sales 45,540
D. Accounts 45,540
receivable
Sales 460
discounts
Sales 46,000
7-18
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45. Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of
the current year, with terms 1/15, n/60. Harvey uses the net method of accounting for cash
discounts.
What entry would Harvey's make on April 23, assuming the customer made the correct
payment on that date?
A. Cash 45,540
Sales 460
Accounts 46,000
receivable
B. Cash 46,000
Sales 460
discounts
Accounts 46,000
receivable
Interest 460
revenue
C. Cash 45,540
Sales 460
discounts
Accounts 46,000
receivable
D. Cash 45,540
Accounts 45,540
receivable
7-19
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46. Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of
the current year, with terms 1/15, n/60. Harvey uses the net method of accounting for cash
discounts.
What entry would Harvey's make on June 10, assuming the customer made the correct
payment on that date?
A. Cash 46,000
Accounts 45,540
receivable
Discounts 460
revenue
B. Cash 46,000
Accounts 45,540
receivable
Interest 460
revenue
C. Cash 46,000
Accounts 46,000
receivable
D. Cash 46,460
Accounts 46,000
receivable
Interest 460
revenue
7-20
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47. Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer
agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record
this reduction by crediting accounts receivable and debiting:
A. Sales.
B. Sales discounts.
C. Sales returns.
D. Sales allowances.
48. Tom's Textiles shipped the wrong material to a customer, who refused to accept the order.
Upon receipt of the material, Tom's would credit accounts receivable and debit:
A. Sales.
B. Sales discount.
C. Sales returns.
D. Sales allowances.
49. Memorex Disks sells computer disk drives with right-of-return privileges. Returns are
material and reasonably predictable. Memorex should:
50. Galaxy sells used videogames for cash and provides a one-week return right. Returns are
material and reasonably predictable. Galaxy should:
7-21
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51. False Value Hardware began 2016 with a credit balance of $32,000 in the allowance for sales
returns account. Sales and cash collections from customers during the year were $650,000
and $610,000, respectively. False Value estimates that 6% of all sales will be returned. During
2016, customers returned merchandise for credit of $28,000 to their accounts.
What is the balance in the allowance for sales returns account at the end of 2016?
A. $11,000.
B. $39,000.
C. $43,000.
D. $21,000.
52. False Value Hardware began 2016 with a credit balance of $32,000 in the allowance for sales
returns account. Sales and cash collections from customers during the year were $650,000
and $610,000, respectively. False Value estimates that 6% of all sales will be returned. During
2016, customers returned merchandise for credit of $28,000 to their accounts.
False Value's 2016 income statement would report net sales of:
A. $622,000.
B. $607,000.
C. $646,000.
D. $611,000.
53. Rusty Hardware makes only cash sales. It began 2016 with a credit balance of $32,000 in the
refund liability account. Sales during 2016 were $600,000. Rusty estimates that 6% of all
sales will be returned. During 2016, customers returned merchandise for credit of $28,000 to
their accounts.
What is the balance in the allowance for sales returns account at the end of 2016?
A. $32,000.
B. $39,000.
C. $43,000.
D. $40,000.
7-22
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54. Rusty Hardware makes only cash sales. It began 2016 with a credit balance of $32,000 in the
refund liability account. Sales during 2016 were $600,000. Rusty estimates that 6% of all
sales will be returned. During 2016, customers returned merchandise for credit of $28,000 to
their accounts.
A. $600,000.
B. $564,000.
C. $568,000.
D. $604,000.
7-23
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57.
A company uses the allowance method to account for bad debts. What is the effect on each
of the following accounts of the collection of an account previously written off?
a. Increase Decrease
b. No effect Decrease
c. Increase No effect
d. No effect No effect
A. Option A
B. Option B
C. Option C
D. Option D
58. Collection of accounts receivable that previously have been written off results in an increase
in cash and an increase in:
A. Accounts receivable.
B. Allowance for uncollectible accounts.
C. Bad debts expense.
D. Retained earnings.
59. Which of the following does not reduce the balance in accounts receivable?
7-24
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60. Chez Fred Bakery estimates the allowance for uncollectible accounts at 3% of the ending
balance of accounts receivable. During 2016, Chez Fred's credit sales and collections were
$125,000 and $131,000, respectively. What was the balance of accounts receivable on
January 1, 2016, if $180 in accounts receivable were written off during 2016 and if the
allowance account had a balance of $750 on December 31, 2016?
A. $5,820.
B. $31,000.
C. $31,180.
D. None of these answer choices are correct.
61. The following information relates to Halloran Co.'s accounts receivable for 2016:
What amount should Halloran report for accounts receivable, before allowances, at
December 31, 2016?
A. $1,040,000.
B. $970,000.
C. $760,000.
D. None of these answer choices are correct.
7-25
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62. Calistoga Produce estimates bad debt expense at ½% of credit sales. The company reported
accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650,
respectively, at December 31, 2015. During 2016, Calistoga's credit sales and collections
were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written
off.
A. $467,000.
B. $473,280.
C. $465,280.
D. $469,280.
63. Calistoga Produce estimates bad debt expense at ½% of credit sales. The company reported
accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650,
respectively, at December 31, 2015. During 2016, Calistoga's credit sales and collections
were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written
off.
A. $1,720.
B. $1,650.
C. $1,505.
D. $1,575.
7-26
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64. Calistoga Produce estimates bad debt expense at ½% of credit sales. The company reported
accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650,
respectively, at December 31, 2015. During 2016, Calistoga's credit sales and collections
were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written
off.
Calistoga's adjusted allowance for uncollectible accounts at December 31, 2016, is:
A. $1,575.
B. $1,505.
C. $1,650.
D. $1,720.
65. The balance in accounts receivable at the beginning of 2016 was $300. During 2016, $1,600
of credit sales were recorded. If the ending balance in accounts receivable was $250 and
$100 in accounts receivable were written off during the year, the amount of cash collected
from customers during 2016 was:
A. $1,600.
B. $1,650.
C. $1,550.
D. $1,900.
66. In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance
for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts
receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000,
and cash collections from credit customers totaled $1,950,000.
What bad debt expense would Dinty report in its first-year income statement?
A. $50,000.
B. $82,000.
C. $114,000.
D. Can't be determined from the given information
7-27
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67. In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance
for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts
receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000,
and cash collections from credit customers totaled $1,950,000.
What accounts receivable balance would Dinty report in its first year-end balance sheet?
A. $196,000.
B. $218,000.
C. $230,000.
D. None of these is correct.
68. In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance
for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts
receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000,
and cash collections from credit customers totaled $1,950,000.
In Dinty's adjusting entry for bad debts at year-end, which of these would be included?
7-28
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69. For 2016, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company
reported accounts receivable and an allowance for uncollectible accounts of $86,500 and
$2,100, respectively, at December 31, 2015. During 2016, Rahal's credit sales and collections
were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written
off.
A. $90,500.
B. $88,160.
C. $82,500.
D. $80,160.
70. For 2016, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company
reported accounts receivable and an allowance for uncollectible accounts of $86,500 and
$2,100, respectively, at December 31, 2015. During 2016, Rahal's credit sales and collections
were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written
off.
A. $2,100.
B. $2,340.
C. $4,080.
D. None of these answer choices are correct.
7-29
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71. For 2016, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company
reported accounts receivable and an allowance for uncollectible accounts of $86,500 and
$2,100, respectively, at December 31, 2015. During 2016, Rahal's credit sales and collections
were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written
off.
Rahal's adjusted allowance for uncollectible accounts at December 31, 2016, is:
A. $4,340.
B. $4,100.
C. $3,800.
D. $4,040.
72. The following information pertains to Jacobsen Co.'s accounts receivable at December 31,
2016:
0-30 $420,000 2%
31-60 140,000 5%
During 2016, Jacobsen wrote off $18,000 in receivables and recovered $6,000 that had been
written off in prior years. Jacobsen's December 31, 2015, allowance for uncollectible accounts
was $40,000. Under the aging method, what amount of allowance for uncollectible accounts
should Jacobsen report at December 31, 2016?
A. $28,000.
B. $31,400.
C. $55,400.
D. $49,400.
7-30
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73. When you use an aging schedule approach for estimating uncollectible accounts:
A. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts
balance is measured directly.
B. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts
balance is measured indirectly.
C. Bad debts expense is measured directly, and the allowance for uncollectible accounts
balance is measured directly.
D. Bad debts expense is measured directly, and the allowance for uncollectible accounts
balance is measured indirectly.
75. If a company uses the balance sheet approach to estimate bad debt expense, bad debt
expense for a period can be determined by:
7-31
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76. As of January 1, 2016, Farley Co. had a credit balance of $520,000 in its allowance for
uncollectible accounts. Based on experience, 2% of Farley's credit sales have been
uncollectible. During 2016, Farley wrote off $650,000 of accounts receivable. Credit sales for
2016 were $18,000,000. In its December 31, 2016, balance sheet, what amount should Farley
report as allowance for uncollectible accounts?
A. $230,000.
B. $360,000.
C. $590,000.
D. $880,000.
7-32
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77. San Mateo Company had the following account balances at December 31, 2016, before
recording bad debt expense for the year:
San Mateo is considering the following approaches for estimating bad debts for 2016:
What amount should San Mateo charge to bad debt expense at the end of 2016 under each
method?
a. $ 36,500 $62,000
b. $ 58,500 $62,000
c. $ 58,500 $84,000
d. $117,000 $95,000
A. Option A
B. Option B
C. Option C
D. Option D
7-33
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78. As of December 31, 2015, Gill Co. reported accounts receivable of $216,000 and an allowance
for uncollectible accounts of $8,400. During 2016, accounts receivable increased by $22,000,
and $7,800 of bad debts were written off. An analysis of Gill Co.'s December 31, 2016,
accounts receivable suggests that the allowance for uncollectible accounts should be 3% of
accounts receivable. Bad debt expense for 2016 would be:
A. $6,540.
B. $7,800.
C. $7,140.
D. None of these answer choices are correct.
79. As of December 31, 2016, Amy Jo's Appliances had unadjusted account balances in accounts
receivable of $311,000 and $970 in the allowance for uncollectible accounts, following 2016
write-offs of $6,450 in bad debts. An analysis of Amy Jo's December 31, 2016, accounts
receivable suggests that the allowance for uncollectible accounts should be 2% of accounts
receivable. Bad debt expense for 2016 should be:
A. $6,220.
B. $6,450.
C. $5,250.
D. None of these answer choices are correct.
A. Sales to customers.
B. Loans to employees.
C. Income tax refund receivable.
D. Advances to affiliated companies.
7-34
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McGraw-Hill Education.
81. Long-term notes receivable issued for noncash assets at an unrealistically low interest rate
will be:
82. Priscilla's Exotic Pets discounted a note receivable without recourse and the sales criteria
were met. The discounting is recorded as:
A. A secured borrowing.
B. Only note disclosure of the arrangement is required.
C. A sale.
D. None of these answer choices are correct.
83. Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-
year, noninterest-bearing note when an equivalent loan would carry 10% interest. Drebin
would record sales revenue on the date of sale equal to:
A. $50,000.
B. Zero.
C. The future value of $50,000 using a 10% interest rate.
D. The present value of $50,000 using a 10% interest rate.
84. A note receivable Mild Max Cycles discounted with recourse was dishonored on its maturity
date. Mild Max would debit:
7-35
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McGraw-Hill Education.
85. Peecher accepted a three-year, noninterest-bearing note in exchange for merchandise sold.
Which of the following is true?
A. Peecher would credit a discount on note receivable when recording the sale.
B. Peecher would debit interest revenue over the life of the note.
C.
Peecher would debit notes receivable when the note is collected.
D.
Peecher would multiply sales revenue by the effective interest rate to determine interest
revenue each period.
86. Baker Inc. acquired equipment from the manufacturer on 10/1/2016 and gave a noninterest-
bearing note in exchange. Baker is obligated to pay $918,000 on 4/1/2017 to satisfy the
obligation in full. If Baker accrued interest of $9,000 on the note in its 2016 year-end financial
statements, what is its imputed annual interest rate?
A. 2%.
B. 4%.
C. 6%.
D. None of these answer choices are correct.
87. Frasquita acquired equipment from the manufacturer on 6/30/2016 and gave a noninterest-
bearing note in exchange. Frasquita is obligated to pay $550,000 on 4/30/2017 to satisfy the
obligation in full.
If Frasquita accrued interest of $15,000 on the note in its 2016 year-end financial statements,
what amount would it record the equipment on its 6/30/2016 balance sheet?
A. $500,000.
B. $515,000.
C. $550,000.
D. $525,000.
7-36
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McGraw-Hill Education.
88. Frasquita acquired equipment from the manufacturer on 6/30/2016 and gave a noninterest-
bearing note in exchange. Frasquita is obligated to pay $550,000 on 4/30/2017 to satisfy the
obligation in full.
If Frasquita accrued interest of $15,000 on the note in its 2016 year-end financial statements,
what would the manufacturer record in its 2016 income statement for this transaction?
89. Frankenstein Enterprises received two notes from customers for sales that Frankenstein
made in 2016. The notes included:
Note A: Dated 5/31/2016, principal of $120,000 and interest due 3/31/2017.
Note B: Dated 7/1/2016, principal of $200,000 and interest at 8% annually, due on 4/1/2017.
Frankenstein had accrued a total of $14,400 interest receivable from these notes in its
12/31/2016 balance sheet.
A. 9.14%.
B. 8%.
C. 9.74%.
D. 9.44%.
7-37
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McGraw-Hill Education.
90. Frankenstein Enterprises received two notes from customers for sales that Frankenstein
made in 2016. The notes included:
Note A: Dated 5/31/2016, principal of $120,000 and interest due 3/31/2017.
Note B: Dated 7/1/2016, principal of $200,000 and interest at 8% annually, due on 4/1/2017.
Frankenstein had accrued a total of $14,400 interest receivable from these notes in its
12/31/2016 balance sheet.
What amount of interest revenue would Frankenstein earn on these notes during 2017?
A. Above $12,000.
B. Between $7,000 and 10,000.
C. Less than $5000.
D. None of these answer choices are correct.
7-38
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McGraw-Hill Education.
91. Plunder Inc. accepted a six-month noninterest-bearing note for $2,800 on January 1, 2016.
The note was accepted as payment of a delinquent receivable of $2,500.
A. Notes 2,500
receivable
Accounts 2,500
receivable
B. Notes 2,800
receivable
Accounts 2,500
receivable
Discount 300
on note
receivable
C. Notes 2,800
receivable
Reserve 2,500
for
delinquent
accounts
Allowance 300
for bad
debts
D. Notes 2,800
receivable
Accounts 2,500
receivable
7-39
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Gain on 300
delinquent
account
7-40
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McGraw-Hill Education.
92. Plunder Inc. accepted a six-month noninterest-bearing note for $2,800 on January 1, 2016.
The note was accepted as payment of a delinquent receivable of $2,500.
A. Discount 300
on note
receivable
Interest 300
revenue
Cash 2,800
Note 2,800
receivable
B. Cash 2,500
Note 2,500
receivable
C. Cash 2,800
Accounts 2,500
receivable
Interest 300
revenue
D. Cash 2,500
Discount 300
on note
receivable
Note 2,800
receivable
7-41
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
93.
Chen Inc. accepted a two-year noninterest-bearing note for $605,000 on January 1, 2016. The
note was accepted as payment for merchandise with a fair value of $500,000. The effective
interest rate is 10%.
A. Note 605,000
receivable
Accounts 605,000
receivable
B. Note 500,000
receivable
Accounts 500,000
receivable
C. Note 605,000
receivable
Discount 105,000
on note
receivable
Sales 500,000
revenue
D. Note 605,000
receivable
Interest 105,000
7-42
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
revenue
Cost of 500,000
sales
7-43
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McGraw-Hill Education.
94. Chen Inc. accepted a two-year noninterest-bearing note for $605,000 on January 1, 2016. The
note was accepted as payment for merchandise with a fair value of $500,000. The effective
interest rate is 10%.
A. Cash 50,000
Interest 50,000
receivable
B. Cash 50,000
Discount 50,000
on note
receivable
C. Discount 50,000
on note
receivable
Note 50,000
receivable
D. Discount 50,000
on note
receivable
Interest 50,000
revenue
7-44
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
95. Chen Inc. accepted a two-year noninterest-bearing note for $605,000 on January 1, 2016. The
note was accepted as payment for merchandise with a fair value of $500,000. The effective
interest rate is 10%.
A. Discount 55,000
on note
receivable
Cash 605,000
Note 605,000
receivable
Interest 55,000
revenue
B. Cash 605,000
Note 605,000
receivable
C. Cash 605,000
Note 500,000
receivable
Discount 105,000
on note
receivable
D. Cash 605,000
Discount 105,000
on note
receivable
Note 605,000
receivable
7-45
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
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"Vai niin", sanoi presidentti; "jatkakaa".
Kaksi todistajaa.
Oli katkeraa ivaa, että mies, joka oli niin kauvan urheillut kuoleman
kanssa ja hieronut sillä kauppoja, tuotiin itse tänne kuolleena,
paljastettavaksi ja tuijoteltavaksi! Vähänpä nyt oli hyötyä hänen
kujeistaan ja kemiallisista sekoituksistaan, hänen kamalista
tiedoistaan ja siitä salaperäisyydestä, johon hän oli verhoutunut.
Manala oli saanut hänet kolkon pään, mustan sydämen ja kaikki.
Niin tylsinä kuin hänen aistinsa vielä olivatkin, huomasi hän, että
kuningas istui kumartuneena eteenpäin, omituinen terävä ilme
kasvoillaan,— että tuomarit näyttivät hämmästyneiltä, että
kardinaalinkin kalvaat piirteet olivat hieman punehtuneet. Ja
yksikään heistä ei katsonut häneen. He olivat kääntyneet poikaan,
joka seisoi pöydän päässä papin vieressä. Ikkunasta osui kalsea
valo hänen kasvoilleen, ja hän puhui. "Minä kuuntelin", kuuli
madame hänen sanovan. "Niin."
"Ja kuinka pitkä aika kului ennen kuin madame de Vidoche tuli?"
kysyi presidentti, nähtävästi pitkittäen kuulustelua, jonka alkuosasta
syytetty ei tiennyt mitään.
"Varma olen."
"Ja madame?"
"Lemmenjauhetta."
"Molemmat."
"Niin."
"Niin."
Poika myönsi.
"Rolandin verestä?"
"Missä asuit?"
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