1. Dawson Corporation transferred $80,000 of accounts receivable to a factor without recourse. The factor charged a 12% fee and the companies agreed that $4,000 is a rreasonable estimate for returns and allowances on the accounts. Calculate the amount of cash Dawson received in the transaction. Enter your answer as a whole number without a $ comma or decimal.
2. What is the lower-of-cost-or-market value of the following inventory item:
Cost = $6.50, Selling price = $9.20, Selling expense = $0.90, Normal profit margin = $2.10, Replacement cost = $6.15.
3. Calculate the value of the ending inventory using Dollar-Value LIFO method. The beginning inventory was $35,200 with an index of 1.1. Ending inventory at current year prices is $42,600. The index at the end of the year is 1.2. Key in your answer as a whole number without a $ comma or decimal.
4. Determine the depreciation for the second year using double declining balance method for machinery which cost $82,000, has an estimated life of 8 years and salvage value of $5,000. Enter your answer as a whole number without a $ comma or decimal.
5. Blake Co. has net sales of $530,000, an accounts receivable balance of $62,000, and a debit balance of $600 in its allowance for bad debts account at the end of the year. What is the amount of the adjustment for bad debts expense assuming (a) bad debts are estimated at 1.2% of net sales, and (b) 3% of the balance in accounts receivable is estimated to be uncollectible?
(a) $6,360 and (b) $1,860
(a) $6,360 and (b) $2,460
(a) $6,960 and (b) $2,460
(a) $5,760 and (b) $1,860