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Acct. 3610 > Exam 2 > Flashcards

Exam 2 Flashcards

1
Q

Factoring receivables set up (seller)

A 
cash
loss on sale of receivables
due from factor 
 ...........Recourse liability 
 ............Accounts Receivable
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2
Q

Factoring receivables set up (buyer)

A

A/R
…………Gain on sale of receivables
…………Due to customer
…………Cash

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3
Q

Factoring receivables- Collect 8,000 to satisfy $8,200 (seller)

A

Loss on sale of receivable 200

………….due from factor 200

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4
Q

Factoring receivables- Collect 8,000 to satisfy $8,200 (buyer)

A

Cash 8000
Due to customer 200
………A/R 8200

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5
Q

Factoring receivables- deem 110 uncollectible (seller)

A

Recourse liability 110

…….Cash 110

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6
Q

Factoring receivables- deem 110 uncollectible (buyer)

A

Cash 110

…..A/R 110

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7
Q

Factoring receivables- settle liabilities and close out accounts (buyer)

A

PAY REST OF DUE FROM FACTOR:
Due to customer
……Cash

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8
Q

Factoring receivables- settle liabilities and close out accounts (seller)

A

CLOSE OUT ESTIMATED RL:

Recourse Liabilities (Original #-$ deemed uncollect)
........Loss on sale of rec

GET REST OF DUE FROM FACTOR:

Cash (original amount-before)
…….Due from factor

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9
Q

Sales on credit–Net Method– (seller) 1/1

A

A/R ($ x.97)
…….Sales Rev

COGS
……..Inventory

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10
Q

Returned items on credit (seller) —-Net Method

A

Sales Returns/allowance $ x.97
……A/R

Returned Inventory
…..COGS

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11
Q

(Net method) Customer pays for the inventory (that was on credit) inside discount period for 1000$ (seller)

A

Cash 1,000

…..A/R 1,000

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12
Q

(Net method) end of the discount period for inventory items on credit being sold (seller) —not all inventory paid for yet—

A

A/R

………….Discount forfeited from sale (1990-200-98/.98-#)

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13
Q

(Net method) Customer pays your the rest of $$ for inventory outside of the discount period

A

Cash

…… A/R (Sales rev adj - returns adj- cash paid + forefeited$)

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14
Q

Selling notes receivable premium (seller) 1/1

A

Notes Receivable (given amount)
Premium on N/R xxx
…….Cash (Single + Annuity)

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15
Q

Selling notes receivable premium (seller) adjusting

A

Cash (interest payment–annuity on chart)
……Premium on N/R xx
……Interest Rev (Single + Annuity xMR)

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16
Q

Selling notes receivable close out

A

Cash (initial amount)

……N/R

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17
Q

Selling notes receivable (zero interest bearing) 1/1

A

Notes Receivable (given amount)
…….Discount on N/R xxx
…….Cash (Single + NO Annuity)

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18
Q

Selling notes receivable (zero interest bearing) ADJ

A

Discount on N/R
…….Interest Rev (Single + NO Annuity x MR)

*** Note.. no cash payment

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19
Q

Selling notes receivable with change in % (ADJ)
— Original BV + discount < New BV

Remember: NEW BV use less PERIODS AND different %

A

old adj journal:

Cash
Discount on notes rec
….. Interest rev

AND:
Fair value Adj.
…. gain on unrealized holding

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20
Q

Selling notes receivable with change in % (ADJ)
— Original BV + discount > New BV

Remember: NEW BV use less PERIODS AND different %

A

old adj journal:

Cash
Discount on notes rec
….. Interest rev

AND:
Loss on unrealized holding
…..Fair value Adj.

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21
Q

Repurchase Agreement… what do you do first???

A

Solve for imputed interest

22
Q

Repurchase Agreement: initial sale (seller)

A

Cash $$amount

…….Liability to _____

23
Q

Repurchase Agreement- 1st Adj journal at end of period

A

Interest expense. (initial $ amount x imputed interest)

….liability to ____

24
Q

Repurchase Agreement- 2st Adj journal at end of period

A

Interest expense. ($ amount + 1st interest expense x imputed interest)
….liability to ____

25
Q

Repurchase Agreement- Buy back with cash at end of period

A 
Interest expense  ($+ 1st interest expense x interest)
....liability to \_\_\_\_

Liability to _____ (ending amount)
…….Cash

26
Q

sale on consignment (consignee)

-item shipped and seller pays for shipping for 2500$

A

none

27
Q

sale on consignment (consignor)

-$30,000 in ivenotry shipped and seller pays for shipping for 2500$ in cash

A

Inventory- consigned 30,000
….Finished goods inventory

Inventory- consigned 2500
….cash 2500

28
Q

sale on consignment (consignee)

-1/30 consignee pays for advertizing (4,000) and will be reimbursed but doesn’t let business know until later

A

Advertizing receivable 400

….. cash

29
Q

sale on consignment (consignor)

-1/30 consignee pays for advertizing (4,000) an will be reimbursed but doesn’t let business know until later

A

NONE

30
Q

sale on consignment (consignee) (15% com)(Adv rec)

  • consignee sells $2500 of merch and notifies the business
  • remits cash
A

Cash 25000 (1st)
….Commission rev. 37500
….Adv. Receivable 4000
….Payable to ____ xxx-last

Payable to _____
….. Cash

31
Q

sale on consignment (consignor) (15% com)(Adv rec)

  • consignee sells $2500 of merch and notifies the business
  • remits cash
A

Cash XXX (last)
Adv. Exp 4,000
Commission Exp. 3750
…….Sales revenue for consigned goods 25,000 (FIRST)

COGs (COST OF inv + shipping/ % of goods sold)
…….Inventory Consigned

32
Q

Inventory with warranty (seller)

1 yr of assurance warranty: estimated at 1,000
2 yrs of extended warranty: 2,000$
COGS=17,000
Selling price= 30,000

-sale of inventory (1/1) for cash

A

Cash 32,000
….sales rev 30,000
….Unearned ext. warranty rev. 2,000

COGS 17,000
….Inventory 17,000

33
Q

Inventory with warranty (seller)

1 yr of assurance warranty: estimated at 1,000
2 yrs of extended warranty: 2,000$
COGS=17,000
Selling price= 30,000

—-end of year adj. 12/31

A

Warranty expense 1,000

…..Warranty liability 1,000

34
Q

Inventory with warranty (seller)

1 yr of assurance warranty: estimated at 1,000
2 yrs of extended warranty: 2,000$
COGS=17,000
Selling price= 30,000

-Customer doesn’t use extended warranty

2 months after end of assurance

A

2,000/24 months= 83.33 x 2 months = #

Unearned extended warranty rev. #
….. Ext. warranty rev.

35
Q

Contract Asset (seller)

11/1 enter into contract

A

NONE

36
Q

Contract Asset (seller)

Provide 1/2 items

A

Contract Asset- shoes ($ value)
…. Sales Rev.

COGS
……Inventory

37
Q

Contract Asset (seller)

Provide 2nd of 2 items but not paid until a week from now

A

Accounts Receivable
…… Contract Asset (price)
….. Sales rev- 2nd item (price2)

COGS (item 2 cost)
….Inventory- item 2

38
Q

Contract Asset (seller)

seller is paid for both goods from previous delivery

A

Cash

…..accounts receivable

39
Q

buying inventory on credit

  • perputual
  • period
A

Perpetual:
Inventory
…accounts payable

Periodic:
Purchases
…accounts payable

40
Q

returning inventory on credit

  • perputual
  • period
A

Perpetual:
Accounts Payable
….inventory

Periodic:
Accounts Payable
….Purchase Returns

41
Q

_____ + LIFO reserve = _____

A

FIFO inv. + LIFO reserve = LIFO inv.

42
Q

LIFO COGs (same/opposite sign) change in LIFO reserve. = ending COGS

A

Same

43
Q

FIFO COGS (same/opposite sign) change in LIFO reserve

A

Opposite

44
Q

Lower of cost or Net Realizable Value

—COGS Method Journal entry

A

COGS

……Allowance to reduce inv. To NRV

45
Q

Lower of cost or Net Realizable Value

—loss method Journal entry

A

Loss due to LCNRV adj.

…..Allowance to reduce inv. To NRV

46
Q

Lower of cost or designated market

-—COGS Method Journal entry

A

COGS

….Allowance to reduce inv. to market

47
Q

Lower of cost or designated market

-—loss method Journal entry

A

loss due to decline of inv. To market

….Allowance to reduce inv. To market

48
Q

Estimated cash returns of $100

A

Sales returns/allowance
……Accounts payable

Estimated returned inventory
…..COGS

49
Q

Estimated credit returns of $100

A

Sales returns/allowance
……Allowance for sales returns/allowance

Estimated returned inventory
…..COGS

50
Q

Actual credit returns

A

Sales returns/allowance
…..A/R

Returned inventory
….COGS

Acct. 3610 (3 decks)

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