136.Gowns, Inc. uses the percentage of receivables basis to estimate its bad debts. At December 31, 2014, Gowns estimates total bad debts that will become uncollectible in the future as €5,570. The existing balance in the Allowance for Doubtful Accounts is a debit balance of €1,320. The Accounts Receivable balance at December 31, 2014 is €99,000. The cash realizable value of Accounts Receivable reported on the statement of financial position at December 31, 2014 is
a.€92,110.
b.€104,570.
c.€93,430.
d.€94,750.
137.Gowns, Inc. uses the percentage of sales basis to estimate its bad debts. For the year ended December 31, 2014, Gowns' total credit sales are €1,500,000. Management of the company estimates that 1% of credit sales will become uncollectible. The existing balance in the Allowance for Doubtful Accounts is a debit balance of €1,750. The Accounts Receivable balance at December 31, 2014 is €132,000. The entry to record bad debt expense at December 31, 2014 will impact the statement of financial position by
a.Increasing expenses by €13,250.
b.Increasing the Allowance for Doubtful Accounts by €13,250.
c.Increasing the Allowance for Doubtful Accounts by €15,000.
d.Increasing the Allowance for Doubtful Accounts by €16,750.
138.Gowns, Inc. uses the percentage of sales basis to estimate its bad debts. For the year ended December 31, 2014, Gowns' total credit sales are €1,500,000. Management of the company estimates that 1% of credit sales will become uncollectible. The existing balance in the Allowances for Doubtful Accounts is a debit balance of €1,750. The Accounts Receivable balance at December 31, 2014 is €132,000. The cash realizable value of Accounts Receivable reported on the statement of financial position at December 31, 2014 is
a.€117,000.
b.€118,750.
c.€115,250.
d.€145,250.
139.Gowns, Inc. uses the percentage of sales basis to estimate its bad debts. For the year ended December 31, 2014, Gowns' total credit sales are €1,500,000. Management of the company estimates that 1% of credit sales will become uncollectible. The existing balance in the Allowances for Doubtful Accounts is a credit balance of €1,750. The Accounts Receivable balance at December 31, 2014 is €132,000. The cash realizable value of Accounts Receivable reported on the statement of financial position at December 31, 2014 is
a.€117,000.
b.€118,750.
c.€115,250.
d.€145,250.
140.Miles to Go is a travel agency specializing in tours to Africa and Australia. Miles to Go has $1,500,000 in accounts receivable and factors these receivables with Fox Factors. The agreement with Fox calls for a service charge of 2% of the amount of receivables sold. The net effects on the statement of financial position for Miles to Go of factoring its receivables is a(n)
a.Increase in assets of $30,000.
b.Increase in assets of $1,470,000.
c.Increase in equity of $1,470,000.
d.Decrease in equity of $30,000.
141.Miles to Go is a travel agency specializing in tours to Africa and Australia. Miles to Go has $3,200,000 in accounts receivable. During 2014, miles to Go enters into a factoring arrangement with Fox Factors to factor 75% of their receivables. The agreement with Fox calls for a services charge of 2% of the amount of receivables sold. The effects on the statement of financial position for Miles to Go of factoring its receivables includes a(n)
a.Increase in cash of $2,352,000.
b.Increase in assets of $3,200,000.
c.Increase in cash of $3,136,000.
d.Increase in equity of $64,000.
142.On October 1, 2014, Brosnan Company sells (factors) $500,000 of receivables to Nation Factors, Inc. Nation assesses a service charge of 3% of the amount of receivables sold. The journal entry to record the sale by Brosnan will include:
a.a debit of $500,000 to Accounts Receivable.
b.a credit of $515,000 to Cash.
c.a debit of $515,000 to Cash.
d.a debit of $15,000 to Service Charge Expense.
143.On March 1, 2014, Joe Miles purchased a suit at Calvin's Fine Apparel Store. The suit cost $300 and Joe used his Calvin credit card. Calvin charges 2% per month interest if payment on credit charges is not made within 30 days. On April 30, 2014, Joe had not yet made his payment. What entry should Calvin make on April 30th?
a.Uncollectible Account............................300
Accounts Receivable......................................300
b.Bad Debt Expense...............................294
Interest Expense........................................6
Accounts Receivable......................................300
c.Accounts Receivable.............................306
Interest Revenue........................................6
Sales Revenue........................................300
d.Accounts Receivable.............................6
Interest Revenue........................................6
144.Newland Retailers accepted $90,000 of Citibank Visa credit card charges for merchandise sold on July 1. Citibank charges 4% for its credit card use. The entry to record this transaction by Newland Retailers will include a credit to Sales Revenue of $90,000 and a debit(s) to
a.Cash $86,400 and Service Charge Expense $3,600.
b.Accounts Receivable $86,400 and Service Charge Expense $3,600.
c.Cash $86,400 and Interest Expense $3,600.
d.Accounts Receivable $90,000.
145.ABC Company accepted a national credit card for a €7,500 purchase. The cost of the goods sold is €6,000. The credit card company charges a 3% fee. What is the impact of this transaction on net operating income?
a.Increase by €1,455
b.Increase by €1,500
c.Increase by €1,275
d.Increase by €7,275