Bradshaw Company Has a Balance in Its Accounts Receivable Control

question 33

Essay

Bradshaw Company has a balance in its Accounts Receivable control account of $13000 on January 1 2016. The subsidiary ledger contains three accounts: Brown Company balance $6000; Smith Company balance $2500 and Coco's Company. During January the following receivable-related transactions occurred. $$\begin{array} { l c c c } & \text { Credit Sales } & \text { Collections } & \text { Returns } \\\hline \text { Brown Company } & \$ 15,000 & \$ 8,000 & \$ - 0 - \\\text { Smith Company } & 9,000 & 4,500 & 1,000 \\\text { Coco's Company } & 8,500 & 6,500 & - 0 -\end{array}$$ Instructions
(a) What is the January 1 balance in the Coco's Company subsidiary account?
(b) What is the January 31 balance in the control account?
(c) Compute the balances in the subsidiary accounts at the end of the month.
(d) Which January transaction would not be recorded in a special journal?

---

Definitions:

Cash Flows

The sum of funds flowing in and out of a company, particularly influencing its liquid assets.

IRR

Internal Rate of Return, the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Mutually Exclusive

Situations or choices where the acceptance or selection of one necessarily excludes the other(s).

Value Foregone

The benefit given up by choosing one investment or action over another alternative; essentially the opportunity cost of a decision.