Vivian, Inc Had Net Sales in 2011 of €700,000

question 127

Multiple Choice

Vivian, Inc had net sales in 2011 of €700,000.At December 31, 2010, before adjusting entries, the balances in selected accounts were: accounts receivable €125,000 debit, and allowance for doubtful accounts €1,200 credit.Vivian estimates that 2% of its net sales will prove to be uncollectable.What is the cash realizable value of the receivables reported on the statement of financial position at December 31, 2011?

• A)€112,200
• B)€122,500
• C)€111,000
• D)€109,800

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Definitions:

Maturity Value

The amount to be received at the maturity date of an investment, typically the principal plus interest.

Note Duration

The term or length of time until a promissory note, bond, or other financial instrument reaches its maturity date.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of assets, typically expressed on an annual basis.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.