Question : 31. Bolt CorporationThe following data concern Bolt Corporation for 2012. Accounts receivable–January : 1224913

 

 

31. Bolt CorporationThe following data concern Bolt Corporation for 2012. 

Accounts receivable–January 1, 2012

$455,000

Credit sales during 2012

900,000

Collections from credit customers during 2012

825,000

Allowance for bad debts before adjustment for the year

2,100

Estimated uncollected accounts based on an aging analysis

29,200

 

 

Refer to information provided for Bolt Corporation. If the aging approach is used to estimate bad debts, what should the balance in the Allowance for Bad Debts account be after the bad debts adjustment? A. $  2,100B. $31,100C. $29,200D. $27,100

 

32. Aspen CorporationData for Aspen Corporation for the year ended December 31, 2012, are presented below. 

Credit sales

$2,100,000

Sales returns

150,000

Gross accounts receivable (December 31, 2012)

420,000

Allowance for bad debts

 

(Before adjustment at December 31, 2012)

25,000

Estimated amount of uncollected accounts based on an aging analysis

75,000

 

 

Refer to the information provided for Aspen Corporation. If Aspen estimates its bad debts at 4% of net credit sales, what amount will be reported as bad debt expense for 2012? A. $50,000B. $75,000C. $78,000D. $84,000

 

33. Aspen CorporationData for Aspen Corporation for the year ended December 31, 2012, are presented below. 

Credit sales

$2,100,000

Sales returns

150,000

Gross accounts receivable (December 31, 2012)

420,000

Allowance for bad debts

 

(Before adjustment at December 31, 2012)

25,000

Estimated amount of uncollected accounts based on an aging analysis

75,000

 

 

Refer to the information provided for Aspen Corporation. If Aspen uses 4% of net credit sales to estimate its bad debts, what will be the balance in the Allowance for Bad Debts account after the adjustment for bad debts? A. $  50,000B. $103,000C. $  78,000D. $  75,000

 

34. Aspen CorporationData for Aspen Corporation for the year ended December 31, 2012, are presented below. 

Credit sales

$2,100,000

Sales returns

150,000

Gross accounts receivable (December 31, 2012)

420,000

Allowance for bad debts

 

(Before adjustment at December 31, 2012)

25,000

Estimated amount of uncollected accounts based on an aging analysis

75,000

 

 

Refer to information provided for Aspen Corporation. If Aspen uses the aging of accounts receivable method to estimate its bad debts, what amount will be reported as bad debt expense for 2012? A. $50,000B. $75,000C. $78,000D. $53,000

 

35. Aspen CorporationData for Aspen Corporation for the year ended December 31, 2012, are presented below. 

Credit sales

$2,100,000

Sales returns

150,000

Gross accounts receivable (December 31, 2012)

420,000

Allowance for bad debts

 

(Before adjustment at December 31, 2012)

25,000

Estimated amount of uncollected accounts based on an aging analysis

75,000

 

 

Refer to the information provided for Aspen Corporation. If Aspen uses the aging of accounts receivable method to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense? A. $343,000B. $345,000C. $420,000D. $395,000

 

36. Aspen CorporationData for Aspen Corporation for the year ended December 31, 2012, are presented below. 

Credit sales

$2,100,000

Sales returns

150,000

Gross accounts receivable (December 31, 2012)

420,000

Allowance for bad debts

 

(Before adjustment at December 31, 2012)

25,000

Estimated amount of uncollected accounts based on an aging analysis

75,000

 

 

Refer to data provided for Aspen Corporation. If Aspen estimates its bad debts at 8% of accounts receivable, what amount will be reported as bad debt expense for 2012? A. $75,000B. $25,000C. $  8,600D. $33,600

 

37. Aspen CorporationData for Aspen Corporation for the year ended December 31, 2012, are presented below. 

Credit sales

$2,100,000

Sales returns

150,000

Gross accounts receivable (December 31, 2012)

420,000

Allowance for bad debts

 

(Before adjustment at December 31, 2012)

25,000

Estimated amount of uncollected accounts based on an aging analysis

75,000

 

 

Refer to the data provided for Aspen Corporation. If Aspen uses 8% of accounts receivables to estimate its bad debts, what will be the balance in the Allowance for Bad Debts account after the adjustment for bad debts? A. $ 33,600B. $ 25,000C. $  8,600D. $ 50,000

 

38. Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment? A. Bad Debts Expense                                                13,000           Allowance for Bad Debts                                            13,000B. Bad Debts Expense                                                15,000           Allowance for Bad Debts                                            15,000C. Bad Debts Expense                                                13,000           Accounts receivable                                                    13,000D. Bad Debts Expense                                                15,000           Accounts receivable                                                    15,000

 

39. Union Corporation reported net credit sales of $2,500,000 and cost of goods sold of $1,800,000 for 2012. Its beginning balance of accounts receivable was $350,000. The accounts receivable balance decreased by $50,000 during 2012. Rounded to two decimal places, what is Union’s accounts receivable turnover ratio for 2012? A.   7.69B.   7.14C.   8.33D. 11.03

 

40. During 2012, the accounts receivable turnover ratio for Upward Company increased from 10 to 15 times per year. Which one of the following statements is the most likely explanation for the change? A. The company’s credit department has followed up with customers whose account balances are past due in order to generate quicker collections.B. The company has decreased sales to its most credit worthy customers.C. The company has increased the amount of time customers have to pay their accounts before they are past due.D. The company has extended credit to more risky customers in order to increase the accounts receivable turnover ratio.

 

 

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