ACCT 382 Week 7 Chapter 7 Homework There may be chances that the figures given in our question and your question doesn’t matches. Don’t worry, we are here to help you. Just write to us at email@example.com and your answer is with you in no time. Question 1 The controller of the Red Wing Corporation is in the process of preparing the companyâ€™s 2013 financial statements. She is trying to determine the correct balance of cash and cash equivalents to be reported as a current asset in the balance sheet. The following items are being considered: a. Balances in the companyâ€™s accounts at the First National Bank; checking $13,500, savings $22,100. b. Undeposited customer checks of $5,200. c. Currency and coins on hand of $580. d. Savings account at the East Bay Bank with a balance of $400,000. This account is being used to accumulate cash for future plant expansion (in 2015). e. $20,000 in a checking account at the East Bay Bank. The balance in the account represents a 20% compensating balance for a $100,000 loan with the bank. Red Wing may not withdraw the funds until the loan is due in 2016. f. U.S. Treasury bills; 2-month maturity bills totaling $15,000, and 7-month bills totaling $20,000. Question 2 Delta Automotive Corporation has the following assets listed in its 12/31/2013 trial balance: Cash in bankâ€”checking account $ 22,500 U.S. Treasury bills (mature in 60 days)* 5,000 Cash on hand (currency and coins) 1,350 U.S. Treasury bills (mature in six months)* 10,000 Undeposited customer checks 1,840 Question 3 Parker Inc. has the following cash balances: First Bank: $ 150,000 Second Bank: (10,000 ) Third Bank: 25,000 Fourth Bank: (5,000 ) Question 4 Harwell Company manufactures automobile tires. On July 15, 2013, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the gross method of accounting for cash discounts. Question 5 Harwell Company manufactures automobile tires. On July 15, 2013, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting for cash discounts. Question 6 Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. Halifax only makes credit sales. The company began 2013 with an allowance for sales returns of $300,000. During 2013, Halifax sold merchandise on account for $11,500,000. This merchandise cost Halifax $7,475,000 (65% of selling prices). Also during the year, customers returned $450,000 in sales for credit. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Question 7 Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2013, net credit sales totaled $4,500,000, and the estimated bad debt percentage is 1.5%. The allowance for uncollectible accounts had a credit balance of $42,000 at the beginning of 2013 and $40,000, after adjusting entries, at the end of 2013. Required: 1. What is bad debt expense for 2013? Bad debt expense $67,500 2. Determine the amount of accounts receivable written off during 2013. Accounts receivable written off $69,500 3. If the company uses the direct write-off method, what would bad debt expense be for 2013? Bad debt expense $69,500 Question 8 Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain
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