31) Renaud, Inc. had credit sales for the period of $85,000. The balance in Allowance for Doubtful Accounts is a debit of $817. What is the credit to Allowance for Doubtful Accounts if Renaud uses the aging method to estimate uncollectible accounts and an aging of accounts receivable reflected an estimated amount of uncollectible accounts of $6,342?
A) $7,159
B) $5,525
C) $6,342
D) $4,250
32) Bestway, Inc. had credit sales for the period of $142,000. The balance in Allowance for Doubtful Accounts is a debit of $643. If Bestway estimates that 2% of credit sales will be uncollectible, what is the
A) Debit Bad Debt Expense, $2,840; credit Allowance for Uncollectible Accounts, $2,840.
B) No entry is required.
C) Debit Bad Debt Expense, $3,483; credit Allowance for Uncollectible Accounts, $3,483.
D) Debit Bad Debt Expense, $2,197; credit Allowance for Uncollectible Accounts, $2,197.
33) Bestway, Inc. had credit sales for the period of $142,000. The balance in Allowance for Doubtful Accounts is a debit of $643. If Bestway ages accounts receivable and determines estimated uncollectible accounts to be $2,840, what is the required journal entry to record estimated uncollectible accounts?
A) Debit Bad Debt Expense, $2,840; credit Allowance for Uncollectible Accounts, $2,840.
B) No entry is required.
C) Debit Bad Debt Expense, $3,483; credit Allowance for Uncollectible Accounts, $3,483.
D) Debit Bad Debt Expense, $2,197; credit Allowance for Uncollectible Accounts, $2,197.
34) Haskins Company has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts.
Current
$24,400
2% uncollectible
31-60 days
7,350
8% uncollectible
61-90 days
3,380
15% uncollectible
91 and up
1,220
30% uncollectible
The current balance in Allowance for Doubtful Accounts is a $958 credit.
A) $2,457
B) $1,949
C) $ 991
D) $ 541
35) Better Built Construction has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts.
Current
$22,000
1% uncollectible
31-60 days
5,500
6% uncollectible
61-90 days
2,400
10% uncollectible
91 and up
900
18% uncollectible
The current balance in Allowance for Doubtful Accounts is a $146 debit.
A) $ 952
B) $1,098
C) $1,759
D) $ 806
36) The percent-of-sales method is called the:
A) balance sheet approach.
B) income statement approach.
C) allowance approach.
D) direct write-off approach.
37) The aging method is called the:
A) balance sheet approach.
B) income statement approach.
C) allowance approach.
D) direct write-off approach.
7.5 Questions
1) Accounts Receivable are reported at current market value in the current assets sections of the balance sheet.
2) Accounts receivable may be reported net of Allowance for Doubtful Accounts.
3) Accounts Receivable should be reported at ________ in the ________ section of a company's balance sheet.
A) Market value; Long-Term Assets
B) Net realizable value; Long-Term Assets
C) Net realizable value; Current Assets
D) Market value; Current Assets
4) Which method does NOT use an allowance for uncollectible accounts?
A) Accounts Receivable plus the Allowance for Doubtful Accounts
B) Allowance for Doubtful Accounts plus NSF checks
C) Accounts Receivable less the Allowance for Doubtful Accounts
D) Accounts Receivable divided by the Allowance for Doubtful Accounts
5) How are net realizable receivables calculated?
A) Accounts Receivable plus the Allowance for Doubtful Accounts
B) Allowance for Doubtful Accounts plus NSF checks
C) Accounts Receivable less the Allowance for Doubtful Accounts
D) Accounts Receivable divided by the Allowance for Doubtful Accounts
