Question

QUESTION 1 The following information applies to the questions displayed below. On January 1 Year 2. Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $31.000 and 5500, respectively. During Year 2. Kincaid reported $72,500 of credit sales, wrote off $550 of receivables as uncollectible, and collected cash from receivables amounting to $74550. Kincaid estimates that it will be unable to collect one percent of credit sales What is the net realizable value of receivables that will be reported on Kincaid's Year 2 balance sheet2 $28.400 $2950 $20025 $27.725 QUESTION 2 The direct wide-off method requires that losses from bad debts be recorded in the period in which sales are made. results in better matching of cos with revenues than the allowance method does not report accounts receivable on the balance sheet as their net realizable value is an acceptable method under generally accepted accounting principles (GAAP QUESTION Excerpts from Huckabee Company's December 31, 2018 and 2017 financial statements are presented below: 2018 2017 Accounts receivable $90.000 $ 90.000 Merchandise inventory 78.000 411.000 Net sales 90,000 390,000 238,000 Cost of goods sold 250,000 Huckabee's 2018 receivables turnover rounded to 2 decimal places) is 4.27. 2.74 3.11.

Answer 1

Question 1.

The correct option: $ 27,725

Accounts Receivable = $ (31,000 + 72,500 - 550 - 74,550) = $ 28,400

Allowance for Doubtful Accounts = $ ( 500 - 550 + 725) = $ 675

Net realizable value of receivables that Kincaid would report = $ ( 28,400 - 675) = $ 27,725

Question 2.

The direct write off method

Correct option is :

requires that losses from bad debts be recorded in the period when sales are made

Question 3 Correct Option is

4.45

Working :

Accounts Receivables Turnover	Credit Sales / Average Accounts Receivable
	= 418000/((98000+90000)/2)
Accounts Receivables Turnover	4.45

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