Expert answer:take home quiz

Expert answer:i have attached the quiz Part 1 (11 points)The Can’t Wait ’Til Winter Break Company is preparing its financial statements for the current year. Its accounts receivable (“credit department”) personnel has struggled with collecting all of the accounts receivable on the books. The credit dept. uses the following AGING schedule showing the likelihood of collecting the outstanding A/R from customers. The aging schedule is for the year ended 12-31-2017 and is based on past (historical) experience.Accounts Months Percentage DeemedReceivable Outstanding Collectible$80,000 < 1 month 98%65,000 1 to 3 months 95%40,000 3 to 6 months 90%30,000 > 6 months 75%The current balance in the Allowance for Bad Debts Account (aka “Allowance for Uncollectible Accounts) account is a $11,350 CREDIT.REQUIRED:1. Using the aging of A/R method, compute the amount of bad debt expense for 2017 AND record the proper adjusting entry. Show all computations clearly!!! (3 points)BAD DEBT EXPENSE COMPUTATION (must show!):ENTRY: DR:CR:DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NOEXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKEDCOMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THANPROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THISREQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.22. Show how the A/R section of the Balance Sheet would appear at 12-31-2017 after taking into account the 2017 adjusting entry. (2 points)ITEM (3) BELOW DOES NOT APPLY TO THE INFORMATION ABOVE!3. Assume a company with an A/R balance of $200,000 and an Allowance for Bad Debts of $60,000, writes off a customer’s account of $10,000. Show what the A/R section of the Balance Sheet would look like before and after the write-off. (2 points)BEFORE WRITE-OFF AFTER WRITE-OFF4. Clearly explain how a WRITE-OFF of A/R (NOT the bad debt expense estimate; there is a difference!) affects the following financial statement items: (2 POINTS)a. Net Income:b. Net Accounts receivable:5. Clearly explain how a bad debt expense estimate (aka “estimate of uncollectible accounts”) affects the following financial statement items: (2 points)a. Net Income:b. Net Accounts receivable:DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NOEXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKEDCOMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THANPROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THISREQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.3Part 2 (2 points)Assume net credit sales are $500,000, beginning A/R was $35,000 and ending A/R was $45,000. Compute the following:ARTO:Average Collection Period:If the credit terms are 2/10; N30, is this collection period good or bad? Explain clearly!!DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NOEXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKEDCOMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THANPROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THISREQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.4Part 3 (8 points)The Can’t Kill My Passion for Accounting Company purchased a conveyor belt machine on January 1, 2017 for $600,000. There was also 5% sales tax on the machine. Installation and delivery charges totaled $7,000. Installers, Alexander and Arthur, performed test runs of the belt which cost $1,000. During the installation, Alexander slipped while snapping a photo to his buddy Jacob. Alexander then bumped into Arthur who fell onto the conveyor belt. Arthur’s ride down the moving belt caused damage equaling $2,500. The machine is expected to have a useful life of 20 years with an estimated salvage value of $18,000.REQUIREMENTS:1. Compute the initial cost of the machine on 1-1-2017. (1.5 points)2. Compute the yearly depreciation expense under the straight-line method.(1.5 points)3. Assume the company sells the machine at the end of 5 years (or 12-31-2021) for $500,000. Compute the book value at 12-31-2021 and calculate the gain or loss on the sale. (2 points)BOOK VALUE:GAIN OR LOSS:4. Record the journal entry for the sale on 12-31-2021. (3 points)
ar_and_ppe_quiz_204_kranyak_1_.pdf

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DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NO
EXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKED
COMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,
CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THAN
PROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THIS
REQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.
WIDENER UNIVERSITY
SCHOOL OF BUSINESS ADMINISTRATION
DEPARTMENT OF ACCOUNTING, ECONOMICS & FINANCE
ACCT. 204
Take Home Quiz –Fall Semester 2017
Professor Kranyak
NAME: _________________________ SIGNATURE: _________________________
Part 1 (11 points)
The Can’t Wait ’Til Winter Break Company is preparing its financial statements for the current
year. Its accounts receivable (“credit department”) personnel has struggled with collecting all of
the accounts receivable on the books. The credit dept. uses the following AGING schedule
showing the likelihood of collecting the outstanding A/R from customers. The aging schedule is
for the year ended 12-31-2017 and is based on past (historical) experience.
Accounts
Receivable
Months
Outstanding
Percentage Deemed
Collectible
$80,000
65,000
40,000
30,000
< 1 month 1 to 3 months 3 to 6 months > 6 months
98%
95%
90%
75%
The current balance in the Allowance for Bad Debts Account (aka “Allowance for
Uncollectible Accounts) account is a $11,350 CREDIT.
REQUIRED:
1.
Using the aging of A/R method, compute the amount of bad debt expense for 2017
AND record the proper adjusting entry. Show all computations clearly!!! (3 points)
BAD DEBT EXPENSE COMPUTATION (must show!):
ENTRY:
DR:
CR:
1
DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NO
EXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKED
COMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,
CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THAN
PROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THIS
REQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.
2.
Show how the A/R section of the Balance Sheet would appear at 12-31-2017 after
taking into account the 2017 adjusting entry. (2 points)
ITEM (3) BELOW DOES NOT APPLY TO THE INFORMATION ABOVE!
3.
Assume a company with an A/R balance of $200,000 and an Allowance for Bad
Debts of $60,000, writes off a customer’s account of $10,000. Show what the A/R
section of the Balance Sheet would look like before and after the write-off. (2 points)
BEFORE WRITE-OFF
4.
AFTER WRITE-OFF
Clearly explain how a WRITE-OFF of A/R (NOT the bad debt expense estimate;
there is a difference!) affects the following financial statement items: (2 POINTS)
a. Net Income:
b. Net Accounts receivable:
5.
Clearly explain how a bad debt expense estimate (aka “estimate of uncollectible
accounts”) affects the following financial statement items: (2 points)
a.
Net Income:
b.
Net Accounts receivable:
2
DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NO
EXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKED
COMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,
CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THAN
PROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THIS
REQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.
Part 2 (2 points)
Assume net credit sales are $500,000, beginning A/R was $35,000 and ending A/R was
$45,000. Compute the following:
ARTO:
Average Collection Period:
If the credit terms are 2/10; N30, is this collection period good or bad? Explain clearly!!
3
DUE DATE: THURSDAY, NOVEMBER 30, 2017 AT THE BEGINNING OF CLASS–NO
EXCEPTIONS! YOUR SIGNATURE BELOW CERTIFIES THAT YOU WORKED
COMPLETELY ALONE ON THIS QUIZ. THAT IS, YOU DO NOT DISCUSS, COMPARE,
CONSULT, TALK, ASSIST, ETC., ABOUT THIS QUIZ WITH ANYONE ELSE OTHER THAN
PROFESSOR KRANYAK. ANY EVIDENCE THAT YOU DID NOT COMPLY WITH THIS
REQUIREMENT WILL RESULT IN A ZERO ON THIS QUIZ.
Part 3 (8 points)
The Can’t Kill My Passion for Accounting Company purchased a conveyor belt machine on
January 1, 2017 for $600,000. There was also 5% sales tax on the machine. Installation and
delivery charges totaled $7,000. Installers, Alexander and Arthur, performed test runs of the belt
which cost $1,000. During the installation, Alexander slipped while snapping a photo to his
buddy Jacob. Alexander then bumped into Arthur who fell onto the conveyor belt. Arthur’s ride
down the moving belt caused damage equaling $2,500. The machine is expected to have a useful
life of 20 years with an estimated salvage value of $18,000.
REQUIREMENTS:
1.
Compute the initial cost of the machine on 1-1-2017. (1.5 points)
2.
Compute the yearly depreciation expense under the straight-line method.
(1.5 points)
3.
Assume the company sells the machine at the end of 5 years (or 12-31-2021) for
$500,000. Compute the book value at 12-31-2021 and calculate the gain or loss on the
sale. (2 points)
BOOK VALUE:
GAIN OR LOSS:
4.
Record the journal entry for the sale on 12-31-2021. (3 points)
4
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