Question : 147. Oceanside Company uses the balance sheet approach in estimating uncollectible : 1229759

147. Oceanside Company uses the balance sheet approach in estimating uncollectible accounts expense. It has just completed an aging analysis of accounts receivable at December 31, 2009. This analysis disclosed the following information?
  
What is the appropriate balance for Oceanside’s Allowance for Doubtful Accounts at December 31, 2009 
A. $95,000.
B. 2% of credit sales in 2009.
C. $1,560.
D. $2,160.

148. At the start of the current year, Minuteman Corporation had a credit balance in the Allowance for Doubtful Accounts of $1,800. During the year a monthly provision of 2% of sales was made for uncollectible accounts. Sales for the year were $600,000, and $5,600 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show: 
A. Uncollectible accounts expense of $13,800.
B. Allowance for Doubtful Accounts with a credit balance of $8,200.
C. Allowance for Doubtful Accounts with a credit balance of $6,400.
D. Uncollectible accounts expense of $5,600.

Dynamic, Inc. had credit sales of $675,000 for March. Accounts receivable of $6,000 were determined to be worthless and were written off during March. Accounts receivable total $575,000 at March 31. Management feels that based on past experience, approximately 2% of net credit sales will prove to be uncollectible.

149. Assuming Dynamic, Inc. uses the direct write-off method of accounting for uncollectible accounts, uncollectible accounts expense for March is: 
A. $13,500.
B. $6,000.
C. $11,500.
D. $17,500.

150. Assuming Dynamic, Inc. uses the income statement approach (an allowance method) to account for uncollectible accounts, uncollectible accounts expense for March is: 
A. $11,500.
B. $17,500.
C. $19,500.
D. $13,500.

At the end of January, the unadjusted trial balance of Windsor, Inc. included the following accounts:
 

151. Windsor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400. What is the amount of uncollectible accounts expense recognized in Windsor’s income statement for January? 
A. $7,400.
B. $6,600.
C. $8,200.
D. $800.

152. Windsor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400. The net realizable value of Windsor’s accounts receivable in the January 31 balance sheet is: 
A. $321,400.
B. $340,000.
C. $322,600.
D. $347,400.

153. Windsor uses the income statement approach in estimating uncollectible accounts expense, and uncollectible accounts expense is estimated to be 2% of credit sales. What is the amount of uncollectible accounts expense recognized in Windsor’s income statement for January? 
A. $8,000.
B. $10,000.
C. $8,700.
D. $7,200.

154. Windsor uses the income statement approach in estimating uncollectible accounts expense, and uncollectible accounts expense is estimated to be 2% of credit sales. The net realizable value of Windsor’s accounts receivable in the January 31 balance sheet is: 
A. $332,800.
B. $332,000.
C. $331,200.
D. $340,000.

155. At the beginning of the year, Robert Company’s Allowance for Doubtful Accounts had a $3,200 credit balance. During January, a provision of 2% of sales was made for uncollectible accounts expense. During January, sales totaled $350,000, and $2,900 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the month. Robert’s financial statements for January show: 
A. Allowance for Doubtful Accounts with a credit balance of $10,200.
B. Allowance for Doubtful Accounts with a credit balance of $7,300.
C. Uncollectible Accounts Expense of $9,900.
D. Uncollectible Accounts Expense of $4,100.

156. Deegan Industries has an accounts receivable turnover rate of 8. Which of the following statements is not true? 
A. Deegan’s accounts receivable are more liquid than those of a business whose accounts receivable turnover rate is 5.
B. Deegan waits approximately 46 days to make collections of its credit sales. (Use 365 days in a year.)
C. Deegan writes off accounts receivable as uncollectible if they are over 45 days old.
D. Deegan’s net credit sales are about eight times the amount of its average accounts receivable.