Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 4.14E
To determine
Concept Introduction:
Accounting is an art of recording, classifying, and summarizing business transactions or business events. It also includes interpretation and communication of results to the users of accounting.
To Calculate:
Amount received by the company from sale of gifts card.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following facts relate to gift cards sold by Sunbru Coffee Company during 2018. Sunbru’s fiscal year ends on December 31.
(a.) In October 2018, sold $3,100 of gift cards, and redeemed $510 of those gift cards.
(b.) In November 2018, sold $4,100 of gift cards, and redeemed $1,410 of October gift cards and $710 of November gift cards.
(c.) In December 2018, sold $3,100 of gift cards, and redeemed $210 of October gift cards, $2,100 of November gift cards, and $410 of December gift cards.
(d.) Sunbru views a gift card to be “broken” (with a remote probability of redemption) two months after the end of the month in which it is sold. Thus, an unredeemed gift card sold at any time during July would be viewed as broken as of September 30.
Required:1. Prepare all journal entries appropriate to be recorded only during the month of December 2018 relevant to gift card sales, gift card redemptions, and gift card breakage.2. Determine the balance of the deferred revenue liability to be…
Bold Company’s 2016 income statement reported total credit revenue of $250,000. Bold’s accounts receivable balance on January 1, 2016 was $30,000, and its December 31, 2016 accounts receivable balance was $10,000. Bold’s accounts payable balance on January 1, 2016 was $25,000, and its December 31, 2016 accounts payable balance was $35,000. How much did Bold collect from customers during 2016?
The following is select financial statement information from Candid Photography:
Year
Net Credit Sales
Ending Accounts Receivable
2017
$2,988,000
$1,290,450
2018
$3,750,860
$1,345,600
2019
$4,000,350
$1,546,550
Compute the accounts receivable turnover ratios and the number of days’ sales in receivables ratios for 2018 and 2019 (round answers to two decimal places):
2018 Accounts Receivable Turnover _______ times.
A. 2.85
B. 2.91
C. 1.42
D. 2.79
2018 Days' Sales in Receivables ________days.
A. 128.07
B. 125.43
C. 257.04
D. 130.82
2019 Accounts Receivable Turnover _________times.
A. 2.97
B. 2.77
C. 1.38
D. 2.59
2019 Days' Sales in Receivables _______days.
A. 131.77
B. 122.90
C. 140.93
D. 264.49
What do the outcomes tell a potential investor about Candid Photography if industry average for accounts receivable turnover ratio is 3…
Chapter 4 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 4 - Read each definition below and write the number of...Ch. 4 - Prob. 4.1ECh. 4 - Comparing the Income Statement and the Statement...Ch. 4 - Prob. 4.3ECh. 4 - Accruals and Deferrals For the following...Ch. 4 - Office Supplies Somerville Corp. purchases office...Ch. 4 - Prepaid Rent—Quarterly Adjustments On September...Ch. 4 - Prob. 4.7ECh. 4 - Depreciation On July 1, 2016, Dexter Corp. buys a...Ch. 4 - Working Backward: Depreciation Polk Corp....
Ch. 4 - Prob. 4.10ECh. 4 - Subscriptions Horse Country Living publishes a...Ch. 4 - Customer Deposits Wolfe $ Wolfe collected $9,000...Ch. 4 - Concert Tickets Sold in Advance Rock N Roll...Ch. 4 - Prob. 4.14ECh. 4 - Wages Payable Denton Corporation employs 50...Ch. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Interest Payable—Quarterly Adjustments Glendive...Ch. 4 - Prob. 4.19ECh. 4 - Interest Receivable On June 1, 2016, MicroTel...Ch. 4 - Rent Receivable Hudson Corp. has extra space in...Ch. 4 - Working Backward: Rent Receivable Randys Rentals...Ch. 4 - The Effect of Ignoring Adjusting Entries on Net...Ch. 4 - The Effect of Adjusting Entries on the Accounting...Ch. 4 - Reconstruction of Adjusting Entries from...Ch. 4 - The Accounting Cycle The steps in the accounting...Ch. 4 - Trial Balance The following account titles,...Ch. 4 - Prob. 4.28ECh. 4 - Preparation of a Statement of Retained Earnings...Ch. 4 - Reconstruction of Closing Entries The following T...Ch. 4 - Closing Entries for Nordstrom The following...Ch. 4 - Prob. 4.32ECh. 4 - Prob. 4.33ECh. 4 - Prob. 4.34ECh. 4 - Revenue Recognition, Cash and Accrual Bases...Ch. 4 - Depreciation Expense During 2016, Carter Company...Ch. 4 - Prob. 4.37MCECh. 4 - Adjusting Entries Kretz Corporation prepares...Ch. 4 - Prob. 4.2PCh. 4 - Prob. 4.3PCh. 4 - Recurring and Adjusting Entries Following are...Ch. 4 - Prob. 4.5PCh. 4 - Prob. 4.6PCh. 4 - Prob. 4.7PCh. 4 - Prob. 4.8PCh. 4 - Prob. 4.9PCh. 4 - Prob. 4.10PCh. 4 - Prob. 4.1IPCh. 4 - Prob. 4.2APCh. 4 - Prob. 4.3APCh. 4 - Prob. 4.7APCh. 4 - Prob. 4.9APCh. 4 - Prob. 4.10APCh. 4 - Prob. 4.11MCPCh. 4 - Prob. 4.12MCPCh. 4 - Prob. 4.13MCPCh. 4 - Prob. 4.11AMCPCh. 4 - Prob. 4.12AMCPCh. 4 - Prob. 4.13AMCPCh. 4 - Prob. 4.1APCh. 4 - Prob. 4.4APCh. 4 - Prob. 4.5APCh. 4 - Prob. 4.6APCh. 4 - Prob. 4.8APCh. 4 - Prob. 4.1DCCh. 4 - Prob. 4.2DCCh. 4 - Prob. 4.3DCCh. 4 - Prob. 4.4DCCh. 4 - Depreciation Jensen Inc., a graphic arts studio,...Ch. 4 - Prob. 4.6DCCh. 4 - Prob. 4.7DC
Knowledge Booster
Similar questions
- The following select financial statement information from Candid Photography. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Candid Photography if industry average for accounts receivable turnover ratio is 3 times and days sales in receivables ratio is 150 days?arrow_forwardBerry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales for the year are $924,123. The balance at the end of 2017 was $378,550. What is the number of days sales in receivables ratio for 2018 (round all answers to two decimal places)?arrow_forwardStarlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?arrow_forward
- The following select financial statement information from Vortex Computing. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Vortex Computing if industry average for accounts receivable turnover ratio is 4 times and days sales in receivables ratio is 85 days?arrow_forwardMillennial Manufacturing has net credit sales for 2018 in the amount of $1,443,630, beginning accounts receivable balance of $588,900, and an ending accounts receivable balance of $624,450. A. Compute the accounts receivable turnover ratio and the number of days' sales in receivables ratio for 2018. Round answers to two decimal places. times days B. What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of day's sales ratio is 180 days? Accounts receivable turnover ratio Sales in receivables ratio a. Millennial Manufacturing collects its accounts more quickly than its competitors. b. A lender may favour Millennial Manufacturing over its competitors because of its faster collection period. c. Without prior years' data it is hard to tell if Millennial Manufacturing is really more efficient than its competitors. d. All of the above statements may be correct.arrow_forwardMillennial Manufacturing has net credit sales for 2018 in the amount of $1,453,630, beginning accounts receivable balance of $590,900, and an ending accounts receivable balance of $626,450. A. Compute the accounts receivable turnover ratio and the number of days' sales in receivables ratio for 2018. Round answers to two decimal places. B. What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of day’s sales ratio is 180 days? a. Millennial Manufacturing collects its accounts more quickly than its competitors. b. A lender may favour Millennial Manufacturing over its competitors because of its faster collection period. c. Without prior years’ data it is hard to tell if Millennial Manufacturing is really more efficient than its competitors. d. All of the above statements may be correct.arrow_forward
- The company wants to assess the account receivable outstanding at the end of December 2016. During the year, total credit sales are 1,000,000 USD. The account receivable outstanding at the end of December 2015 is 20,000 USD and at the end of December 2016 is 25,000 USD. Assess the Accounts Receivable Payment Period of the company. The Accounts Receivable Payment Period isarrow_forwardThe following is select financial statement information from Vortex Computing: Year Net Credit Sales Ending Accounts Receivable 2018 $1,557,200 $398,000 2019 $1,755,310 $444,400 2020 $1,865,170 $500,780 Compute the accounts receivable turnover ratios and the number of days’ sales in receivables ratios for 2019 and 2020 (round answers to two decimal places): 2019 Accounts Receivable Turnover = ["", "", "", ""] times. 2019 Days' Sales in Receivables = ["", "", "", ""] days. 2020 Accounts Receivable Turnover = ["", "", "", ""] times. 2020 Days' Sales in Receivables = ["", "", "", ""] days. What do the outcomes tell a potential investor about Vortex Computing, if 2020 industry average for accounts receivable turnover ratio is 4.00 times and days’ sales in receivables ratio is 91.25 days? It takes Vortex Computing ["", "", ""] its competitors in the industry to collect on accounts receivable. If a lender were deciding between companies,…arrow_forwardThe following is select financial statement information from Vortex Computing: Year Net Credit Sales Ending Accounts Receivable 2018 $1,557,200 $398,000 2019 $1,755,310 $444,400 2020 $1,865,170 $500,780 Compute the accounts receivable turnover ratios and the number of days’ sales in receivables ratios for 2019 and 2020 (round answers to two decimal places): 2019 Accounts Receivable Turnover = ["", "", "", ""] times. 2019 Days' Sales in Receivables = ["", "", "", ""] days. 2020 Accounts Receivable Turnover = ["", "", "", ""] times. 2020 Days' Sales in Receivables = ["", "", "", ""] days.arrow_forward
- Barga Co. reported net sales for 2016 and 2017 of $665,000 and $742,000, respectively. Its year-end balances of accounts receivable follow: December 31, 2016, $63,000; and December 31, 2017, $89,000. a. Complete the below table to calculate the days' sales uncollected at the end of each year. (Round your "Days' Sales Uncollected" answer to 1 decimal place.) ok Days' Sales Uncollected Choose Numerator: Choose Denominator: Days Days' Sales Uncollected %3D Days' sales uncollected 2016: days %3D 2017: days %3D ces < Prev 4 of 4 Nextarrow_forwardse the following selected financial statement information from Black Water Industries. BLACK WATER INDUSTRIES Year Net Credit Sales Ending Accounts Receivable 2017 $687,430 $332,250 2018 705,290 362,450 2019 769,500 403,650 A. Compute the number of days’ sales in receivables ratios for 2018 and 2019. Round your answers to two decimal places. 2018 fill in the blank 1 days 2019 fill in the blank 2 days B. Using the sales in accounts receivable, choose the statement that most closely describes the company's management of its receivables. a. The company collects its accounts slowly, and the days are increasing. b. This may be leave the company unable to pay current debt owed to a lender. c. The company may need to be more aggressive with its receivable collection procedures. d. All of the above statements may be correct.arrow_forwardUse the following financial statement information from Black Water Industries. BLACK WATER INDUSTRIES Ending Accounts Receivable Year Net Credit Sales 2017 $690,430 $335,250 2018 705,290 364,450 2019 770,500 406,650 A. Compute the accounts receivable turnover ratios for 2018 and 2019. Round your answers to two decimal places. 2018 times 2019 times B. Using the accounts receivable turnover, choose the statement that most closely describes the company's management of its receivables. a. The company's lending policies may be too strict. b. Collection efforts are not aggressive enough. There may be uncollectable receivables affecting the beginning and ending C. balances. d. All of the above statements may be correct. a b darrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning