Questions from Intermediate Accounting

Q: Arness Woodcrafters sells $250,000 of receivables to Commercial Factors

Arness Woodcrafters sells $250,000 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 5% and retains an amount equal to 4% of accounts recei...

Q: Use the information presented in BE7-11 for Arness Woodcrafters but

Use the information presented in BE7-11 for Arness Woodcrafters but assume that the recourse liability has a fair value of $4,000, instead of $8,000. Prepare the journal entry and discuss the effect...

Q: Recent financial statements of General Mills, Inc. report net sales

Recent financial statements of General Mills, Inc. report net sales of $12,442,000,000. Accounts receivable are $912,000,000 at the beginning of the year and $953,000,000 at the end of the year. Com...

Q: What is the normal procedure for handling the collection of accounts receivable

What is the normal procedure for handling the collection of accounts receivable previously written off using the direct write-off method? The allowance method?  

Q: Finman Company designated Jill Holland as petty cash custodian and established a

Finman Company designated Jill Holland as petty cash custodian and established a petty cash fund of $200. The fund is reimbursed when the cash in the fund is at $15. Petty cash receipts indicate fun...

Q: Horton Corporation is preparing a bank reconciliation and has identified the following

Horton Corporation is preparing a bank reconciliation and has identified the following potential reconciling items. For each item, indicate if it is (1) added to balance per bank statement, (2) dedu...

Q: Use the information presented in BE7-15 for Horton Corporation.

Use the information presented in BE7-15 for Horton Corporation. Prepare any entries necessary to make Horton’s accounting records correct and complete. In BE7-15 (a) Deposit in transit $5,50...

Q: Restin Co. uses the gross method to record sales made on

Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $50,000 with terms 3/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale....

Q: What are the reasons that a company gives trade discounts? Why

What are the reasons that a company gives trade discounts? Why are trade discounts not recorded in the accounts like cash discounts?  

Q: Assume that Toni Braxton Company has recently fallen into financial difficulties.

Assume that Toni Braxton Company has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2014, one of Toni Braxton’s creditors, the National Americ...