BASIC ACCOUNTING PLZ HELPP!!!!!!?

1. Windy Corporation, which uses the allowance method, has accounts receivable of $51,400 and an allowance for uncollectible accounts of $9,800. An account receivable from Tom Novak of $4,400 is deemed to be uncollectible and is written off.


What is the amount of net accounts receivable before and after the write-off?





Before Write-off: ???


After Write-off: ???





2. The higher the interest rate assumed, the


a. higher the present value of a sum due in the future.


b. lower the present value of a sum due in the future.


c. more one must deposit today to accumulate to a desired sum.


d. higher the present value of an ordinary annuity.





3. Heidi wishes to deposit an amount into her savings account that will enable her to withdraw $800 per year for the next four years. She should deposit $800,


a. divided by the present value of a single sum factor.


b. multiplied by the present value of an ordinary annuity factor.


c. divided by the present value of an ordinary annuity factor. (This can't be it)


d. multiplied by the present value of a single sum factor.





4. Fabian Company is considering the purchase of a machine that will save the company $2,000 per year in operating costs for a period of seven years. The most it should pay for the machine is equal to


a. $2,000 times the present value of an ordinary annuity for 7 periods.


b. $2,000 divided by the present value of a single sum at the end of 7 periods.(This can't be)


c. $2,000 times the present value of a single sum for 7 periods.


d. $14,000.





5. Which of the following does not imply the existence of a contingent liability?


a. A dividend declared but not yet paid


b. Potential liability from a lawsuit


c. A disputed additional tax assessment. (This can't be it)


d. Discounted notes receivable





6. A customer is injured using a company's product. The potential liability that may result is called a(n)


a. estimated warranty liability.


b. definitely determinable liability.


c. estimated liability. (This can't be it)


d. contingent liability.





7. A contingent liability is recorded in the accounting records


a. if the contingency has not been described already in the notes to the financial statements.


b. if it possibly will become an actual liability and the exact amount is known. (Can't be)


c. if it probably will become an actual liability and the amount can be reasonably estimated.


d. under no circumstances.





8. A business accepts a 12 percent, $43,000 note due in three years. Assuming simple interest, how much will the business receive when the note falls due?


a. $43,000


b. $58,480


c. $48,160 (I did the math and this can't be it)


d. $53,320|||1. Windy Corporation, which uses the allowance method, has accounts receivable of $51,400 and an allowance for uncollectible accounts of $9,800. An account receivable from Tom Novak of $4,400 is deemed to be uncollectible and is written off.

What is the amount of net accounts receivable before and after the write-off?

Since Accounts Receivable and Allowance for Doubtful Accounts will both be decreased by the same amount, net Accounts Receivable will be the same before and after the write-off.

The transaction would be:

Dr Allowance for Doubtful Accounts 4,400

Cr Accounts Receivable 4,400

Before Write-off:

51,400 - 9,800 = 41,600

After Write-off:

47,000 - 5,400 = 41,600



2. The higher the interest rate assumed, the

b. lower the present value of a sum due in the future.



3. Heidi wishes to deposit an amount into her savings account that will enable her to withdraw $800 per year for the next four years. She should deposit $800,

This is an ordinary annuity, so it's either (b) or (c). I never use factors when doing these types of problems, so I'm not sure whether you multiply or divide.

b. multiplied by the present value of an ordinary annuity factor.

c. divided by the present value of an ordinary annuity factor. (This can't be it)



4. Fabian Company is considering the purchase of a machine that will save the company $2,000 per year in operating costs for a period of seven years. The most it should pay for the machine is equal to

To be honest, I just don't know on this one. .



5. Which of the following does not imply the existence of a contingent liability?

d. Discounted notes receivable



6. A customer is injured using a company's product. The potential liability that may result is called a(n)

d. contingent liability.



7. A contingent liability is recorded in the accounting records

c. if it probably will become an actual liability and the amount can be reasonably estimated.



8. A business accepts a 12 percent, $43,000 note due in three years. Assuming simple interest, how much will the business receive when the note falls due?

This is simple interest, not compound interest.

(43,000 x 12%) x 3 = 15,480 interest

43,000 + 15,480 =

b. $58,480