Question :
41) Referring to Table 9-4, under the percent-of-accounts-receivable method, the : 1212759
41) Referring to Table 9-4, under the percent-of-accounts-receivable method, the bad-debt expense for the period would be:
A) $33,000.
B) $28,500.
C) $37,500.
D) $30,000.
42) Lester Company uses the allowance method and estimates its bad-debt expense based on aging the receivables. Before the adjusting entry, the allowance for doubtful accounts had a $425 debit balance. Based on aged receivables, Lester estimates that $3,700 will probably prove uncollectible. What is the amount of the adjusting journal entry that Lester should make?
A) $3,700
B) $3,275
C) $4,125
D) $425
43) Fresh Dairy Company uses the allowance method and estimates uncollectible accounts based on a percent of sales. Net credit sales represent 75% of total sales. Total sales for 2014 were $840,000. Historically, 1/2 of 1% of net credit sales have been uncollectible. At December 31, 2014, the balance in allowance for doubtful accounts is a $120 credit. What is the balance in bad-debt expense after the adjusting entry is made?
A) $3,030
B) $4,200
C) $3,150
D) $3,270
Table 9-5
The Ritchie Company gathered the following information pertaining to its year ended December 31, 2014, prior to any adjustments:
Net credit sales for the year
$780,000
Accounts receivable, Dec. 31, 2014
170,000
Allowance for doubtful accounts,
December 31, 2014
3,200
Cr.
Aging of accounts receivable at December 31, 2014:
1-30 days
$95,000
31-60 days
38,000
61-90 days
23,000
Over 90 days
14,000
Total
$170,000
44) Referring to Table 9-5, assume Ritchie uses the percent-of-sales method for estimating uncollectible accounts. Ritchie estimates that uncollectible accounts will be 1.75% of net credit sales. The adjusting entry to record bad-debt expense for the year is:
A)
Bad-Debt Expense
13,650
Accounts Receivable
13,650
B)
Bad-Debt Expense
10,450
Accounts Receivable
10,450
C)
Bad-Debt Expense
16,850
Allow. for Doubtful Accts.
16,850
D)
Bad-Debt Expense
13,650
Allow. for Doubtful Accts.
13,650
45) Refer to Table 9-5. Assume Ritchie uses the percent-of-sales method for estimating uncollectible accounts. Ritchie estimates that bad-debt expense will be 0.6% of net credit sales. The balance in allowance for doubtful accounts after the adjusting entry for uncollectible accounts will be:
A) $7,880.
B) $4,680.
C) $1,480.
D) $3,200.
46) Refer to Table 9-5. Assume Ritchie uses the aging-of-accounts-receivable method for estimating uncollectible accounts. Ritchie estimates that uncollectible accounts will be aged as follows: 2% for 1-30 days; 4% for 31-60 days; 10% for 61-90 days; and 25% for over 90 days. The balance in allowance for doubtful accounts after the adjusting entry for uncollectible accounts will be:
A) $12,280.
B) $6,000.
C) $5,880.
D) $9,220.
47) Refer to Table 9-5. Assume Ritchie uses the percent-of-sales method for estimating uncollectible accounts. Ritchie estimates that bad-debt expense will be 1.3% of net credit sales. After the adjustment for uncollectible accounts is made, the net realizable value of accounts receivable will be:
A) $156,660.
B) $170,000.
C) $159,860.
D) $163,060.
48) Refer to Table 9-5. Assume Ritchie uses the aging-of-accounts-receivable method for estimating uncollectible accounts. Ritchie estimates that uncollectible accounts will be aged as follows: 3% for 1-30 days; 5% for 31-60 days; 8% for 61-90 days; and 20% for over 90 days. The adjusting entry to record bad-debt expense for the year is:
A)
Bad-Debt Expense
12,590
Accounts Receivable
12,590
B)
Bad-Debt Expense
6,190
Allow. for Doubtful Accts.
6,190
C)
Allow. for Doubtful Accts.
6,190
Bad-Debt Expense
6,190
D)
Bad-Debt Expense
9,390
Allow. for Doubtful Accts.
9,390
49) Refer to Table 9-5. Assume Ritchie uses the aging-of-accounts-receivable method for estimating uncollectible accounts. Ritchie estimates that bad-debt expense will be aged as follows: 2.5% for 1-30 days; 4.5% for 31-60 days; 7.5% for 61-90 days; and 22.5% for over 90 days. After the adjustment for uncollectible accounts is made, the net realizable value of the accounts receivable will be:
A) $157,840.
B) $161,040.
C) $170,000.
D) $164,240.
50) When a note matures, the payee should record:
A) unearned revenue.
B) interest revenue.
C) interest expense.
D) note expense.
