ACCT HOMEWORK #5 Self Study Questions 1. C 2. C 3. B 4. B 5. D 6. B 7. C P5-5A 1.

With the current year's total of $160K, it seems unlikely that Arnold will get paid, if it is now the end of the accounting period and that is his receivables balance. Also, Prof. Daxon said to never use the direct write-off method unless absolutely necessary. 2. 75% of $165K should not be expected to be collected 3. 75% of $160K AP 5-1 EQUIP. 5000 CASH 5000 CASH 2850 REV. 2850 A/R 4000 REV. 4000 CASH 3800 Q.P.D* 200 A/R 4000 (5/30) CASH 7500 REV. 7500 A/R 6000 REV. 6000 A/R 24000 REV. 24000 REV. 6480 A/R 6000 %INT. 480 A.F.D.A. ** 2400 A/R 2400

* Quick Payment Discount ** Allowance For Doubtful Accounts

A/R 4000

6000 24000 480

AP 5-2 1. 2008-2009: Decreasin. 2009-2010: Increasing 2. A/R is reported on the Consolidated Statement of Cash Flows page. The receivables turnover ratio is a measure of net credit sales, so if the majority of sales

are cash sales, the turnover ratio is not an accurate measurement of the actual balance in the receivables account. 3. "Net impairment loss recognized in earnings"(?) $940