Question :
31. Newark Company has provided the following information: ? Cash sales, : 1228520
31. Newark Company has provided the following information:
? Cash sales, $450,000
? Credit sales, $1,350,000
? Selling and administrative expenses, $330,000
? Sales returns and allowances, $90,000
? Depreciation expense, $101,000
? Gross profit, $1,360,000
? Increase in accounts receivable, $55,000
? Bad debt expense, $33,000
? Sales discounts, $43,000
How much are Newark’s net sales?
A. $1,634,000
B. $1,800,000
C. $1,667,000
D. $1,745,000
32. Flyer Company has provided the following information:
? Cash sales, $150,000
? Credit sales, $450,000
? Selling and administrative expenses, $110,000
? Sales returns and allowances, $30,000
? Gross profit, $490,000
? Accounts receivable, $110,000
? Sales discounts, $14,000
? Allowance for doubtful accounts credit balance, $1,200
How much is bad debt expense assuming that 5% of accounts receivable is estimated to be uncollectible?
A. $5,500
B. $6,700
C. $4,240
D. $4,300
33. Flyer Company has provided the following information:
? Cash sales, $150,000
? Credit sales, $450,000
? Selling and administrative expenses, $110,000
? Sales returns and allowances, $30,000
? Gross profit, $490,000
? Accounts receivable, $110,000
? Sales discounts, $14,000
? Allowance for doubtful accounts credit balance, $1,200
Flyer estimates bad debt expense assuming that 5% of accounts receivable is estimated to be uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?
A. $5,500
B. $6,700
C. $4,240
D. $4,300
34. Flyer Company has provided the following information:
? Cash sales, $150,000
? Credit sales, $450,000
? Selling and administrative expenses, $110,000
? Sales returns and allowances, $30,000
? Gross profit, $290,000
? Accounts receivable, $110,000
? Sales discounts, $14,000
? Allowance for doubtful accounts credit balance, $1,200
Flyer estimates bad debt expense assuming that 1.5% of credit sales are uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?
A. $7,950
B. $6,750
C. $5,550
D. $7,800
35. Flyer Company has provided the following information:
? Cash sales, $150,000
? Credit sales, $450,000
? Selling and administrative expenses, $110,000
? Sales returns and allowances, $30,000
? Gross profit, $290,000
? Accounts receivable, $110,000
? Sales discounts, $14,000
? Allowance for doubtful accounts credit balance, $1,200
How much is Flyer’s bad debt expense assuming that 1.5% of credit sales have historically been uncollectible.
A. $7,950
B. $6,750
C. $5,550
D. $7,800
36. Which of the following is correct when bad debt expense is recorded at year-end?
A. Current assets are not affected.
B. Gross profit will decrease.
C. Income from operations will decrease.
D. Current liabilities will increase.
37. Which of the following statements is false?
A. The journal entry to record bad debt expense decreases current assets.
B. The journal entry to record bad debt expense decreases retained earnings.
C. The journal entry to write-off an uncollectible account receivable decreases operating income.
D. The journal entry to write-off an uncollectible account receivable does not affect current assets.
38. Which of the following journal entries correctly records bad debt expense?
A. Option A
B. Option B
C. Option C
D. Option D
39. Which of the following journal entries correctly records the write-off of an uncollectible account receivable?
A. Option A
B. Option B
C. Option C
D. Option D
40. The CHS Company has provided the following information:
? Accounts receivable written-off as uncollectible during the year amounted to $11,500.
? The accounts receivable balance at the beginning of the year was $150,000.
? The accounts receivable balance at the end of the year was $210,000.
? The allowance for doubtful accounts balance at the beginning of the year was $14,000.
? The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $12,900.
? Credit sales during the year totaled $900,000.
How much was CHS Company’s bad debt expense?
A. $11,500
B. $12,900
C. $10,400
D. $14,000
