ACCT 370 Read & Interact Revsine, Collins, Johnson, Mittelstaedt, & Soffer Chapter 9 solution answer

ACCT 370 Read & Interact Revsine, Collins, Johnson, Mittelstaedt, & Soffer Chapter 9 solutions complete answers

 

Charles Corporation accepts a 4-year 1% note as payment for its merchandise. The prevailing interest rate at the time is 7%. To compute the present value of the principal and interest payments, Charles would

 

When recording the sale of a note receivable with recourse to a bank that results in a loss,

 

The net realizable value of a company's accounts receivable

 

Conceptually, the expected credit losses should be shown as a deduction

 

The beginning of the month balance of Allowance for credit losses is $45,000. There were no account write-offs during the month. The gross receivables at the end of the month was $2,000,000 and credit sales were $3,000,000. The company would use a 5% assumption with the Gross accounts receivable approach and a 2% assumption with the Sales revenue approach. In recording the Credit loss expense under the Gross accountis receivable approach,

 

Diaz Industries determined that a $12,500 receivable from Sarge Company cannot be collected. Which of the following would be included in the journal entry to account for the uncollectible account?

 

True or false: Firms must continually adjust its allowance as its collection experience and expectations about the future change.

 

Under the revenue recognition standards effective for 2018, the expected credit losses are shown as a (an)

 

The Allowance for sales returns and allowances is

 

The beginning of the month balance of Allowance for credit losses is $100,000. There were no account write-offs during the month. Under the Gross accounts receivable approach, the desired end of the month balance for Allowance for credit losses is $122,000. In recording the credit loss allowance,

 

Which of the following is not true of the journal entry to write off credit losses?

 

All of following could cause net accounts receivable to grow more quickly than sales, except

 

As a recession worsens, the Allowance for credit losses as a percentage of gross accounts receivable would be expected to

 

The journal entry to record the issuance of notes receivable would include a

 

Which of the following are true of the disclosure requirements under ASC Topic 326?

 

To record the effects of a return, a company would

 

When a company receives a 5-year noninterest-bearing note in exchange for its merchandise,

 

Which of the following are reasons for receivables growth exceeding sales growth?

 

Watson Company accepts a 3-year 4% note as payment for its merchandise. The prevailing interest rate at the time is 10%. Watson should

 

Brinkman Corporation sold a machine to Hughes Company for $2,500,000. Hughes signs a two-year, $2,500,000 interest-bearing note with 12% per year to be paid in quarterly installments. 12% approximates prevailing borrowing rates. Which of the following are journal entries associated with this transaction?

 

Under the fair value method,

 

Which of the following is not a receivables disclosure requirement of ASC Topic 326-20-50?

 

In collateralized borrowing, a company

 

When a company receives a 5-year noninterest-bearing note in exchange for its merchandise, the company would

 

When recording a sale of receivables, the journal entry will include a

 

Holmes Company accepts a 4-year 2% note as payment for its merchandise. The prevailing interest rate at the time is 9%. Holmes should

 

When a company uses its receivables as collateral for a loan, the company

 

The fair value of a note receivable changes as

 

When recording the sale of a note receivable without recourse to a bank that results in a loss,

 

In a factoring, a company

 

One condition that must be satisfied before a transferor has surrendered control of a receivable is the

 

When computing the present value of a noninterest-bearing note, one would use the

 

In a securitization,

 

A recourse obligation is

 

An investor is willing to accept less than the face amount of interest of loans included in a securitization because

 

At the time a company receives the proceeds of a loan collateralized by its receivables, the company

 

A bank recognizes a gain upon securitizing receivables because

 

Fletcher, Inc. has a 5%, $10,000 face, note receivable. When there is one year left on the note, Fletcher discounts the note with First National Bank, which charges Fletcher a 10% discount rate. Fletcher will receive

 

The transferor

 

A securitization reduces risk for investors by

 

A servicing asset

 

Improperly accounting for a securitization as a sale instead of a collateralized borrowing

 

A receivable is considered sold when

 

A servicing asset represents

 

All of the following led to the 2008 financial crisis, except

 

Which of the following criteria must be present to constitute a troubled debt restructuring?

 

Which of the following is an indicator of financial difficulties of a debtor?

 

In a troubled debt restructuring with a modification of terms, a creditor

 

A restructuring of debt constitutes a                   if the borrower is unable to pay the debt and the lender grants a concession to the borrower.

 

In a troubled debt restructuring involving a settlement, the lender

 

In a troubled debt restructuring settlement, a creditor

 

Bond Company renegotiates its debt with Bahamas Bank in a troubled debt restructuring. The present value of the new cash flows is less than the book value of the debt, but the undiscounted cash flows exceed the book value of the debt.

 

Dunaway Company modifies a note payable with Washington National Bank as part of a troubled debt restructuring. Both the present value of cash flows and the undiscounted cash flows under the terms of the new note are less than the book value of the note payable.

 

Current U.S. GAAP for troubled debt restructuring can be criticized because

 

Condor Company modifies a note payable with New York Bank as part of a troubled debt restructuring. Both the present value of cash flows and the undiscounted cash flows under the terms of the new note are less than the book value of the note payable.

 

In a troubled debt restructuring involving a settlement, the borrower

 

All of the following represent aggressive revenue recognition practices, except recognizing revenue

 

As an economy comes out of a recession, the Allowance for credit losses as a percentage of gross accounts receivable would be expected to

 

The beginning of the month balance of Allowance for credit losses is $45,000. There were no account write-offs during the month. The gross receivables at the end of the month was $2,000,000 and credit sales were $3,000,000. The company would use a 5% assumption with the Gross accounts receivable approach and a 2% assumption with the Sales revenue approach. In recording the Credit loss expense under the Sales revenue approach,

 

Blackwood Company accepts a 4-year 3% note as payment for its merchandise. The prevailing interest rate at the time is 8%. During the life of the note,

 

In a secured borrowing, a company

 

Patrick, Inc. has a 10%, $20,000 face, note receivable. When there is one year left on the note, Patrick discounts the note with First National Bank, which charges Patrick a 15% discount rate. Patrick will receive

 

Which approach for estimating the credit loss allowance is not acceptable under U.S. GAAP?