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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