Acc400 Financial Accounting: Finals 3 Exercises (E8-3, E10-13, E13-10)

Acc400 Financial Accounting
Final Exam (3 Exercises)

At the beginning of the current period, Huang Corp. had balances in Accounts Receivable of $200,000 and in Allowance for Doubtful Accounts of $9,000 (credit). During the period, it had net credit sales of $800,000 and collections of $743,000. It wrote off as uncollectible accounts receivable of $7,000. However, a $4,000 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $25,000 at the end of the period.
(a) Prepare the entries to record sales and collections during the period.
(b) Prepare the entry to record the write-off of uncollectible accounts during the period.
(c) Prepare the entries to record the recovery of the uncollectible account during the period.
(d) Prepare the entry to record bad debts expense for the period.
(e) Determine the ending balances in Accounts Receivable and Allowance for Doubtful Accounts.
(f) What is the net realizable value of the receivables at the end of the period?
Cyclone, Inc. reports the following liabilities (in thousands) on its January 31, 2007, balance sheet and notes to the financial statements.
Accounts payable 3,263.9 Notes payable—long-term 5,746.7
Accrued pension liability 1,215.2 Operating leases 1,641.7
Accrued liabilities 1,258.1 Loans payable—long-term 335.6
Bonds payable 1,961.2 Payroll-related liabilities 558.1
Current portion of long-term debt 1,992.2 Short-term borrowings 2,563.6
Income taxes payable 235.2 Unused operating line of credit 3,337.6
Warranty liability—current 1,417.3
(a) Identify which of the above liabilities are likely current and which are likely long term. Say if an item fits in neither category. Explain the reasoning for your selection.
(b) Prepare the liabilities section of Cyclone’s balance sheet as at January 31, 2007.

Selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of December 31:
(in millions). 2004 2003
Net sales 4,873.60 5,951.00
Cost of goods sold 3,386.60 4,323.80
Net income 143.30 151.90
Accounts receivable 74.60 60.50
Inventory 1,274.60 1,526.10
Total assets 3,301.50 3,507.30
Total common stockholders’ equity 1,165.90 1,259.70

Compute the following ratios for 2004:
(a) Profit margin.
(b) Asset turnover.
(c) Return on assets.
(d) Return on common stockholders’ equity.
(e) Gross profit rate.
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