Question :
141.Kennedy Company uses the balance sheet approach in estimating uncollectible : 1237644
141.Kennedy Company uses the balance sheet approach in estimating uncollectible accounts expense. The company prepares an adjusting entry to recognize this expense at the end of each month. During the month of July, the company wrote-off a $3,500 receivable and made no recoveries of previous write-offs. Following the adjusting entry for July, the credit balance in the Allowance for Doubtful Accounts was $3,000 larger than it was on July 1. What amount of uncollectible account expense was recorded for July?
A.$2,500.
B.$1,000.
C.$1,500.
D.$6,500.
X – $3,500 = $3,000; X = $6,500
142.Oceanside Company uses the balance sheet approach in estimating uncollectible accounts expense. Its Allowance for Doubtful Accounts has a $1,200 credit balance prior to adjusting entries. It has just completed an aging analysis of accounts receivable at December 31, 2015. This analysis disclosed the following information: What is the appropriate balance for Oceanside’s Allowance for Doubtful Accounts at December 31, 2015?
A.$95,000.
B.$960.
C.$3,360.
D.$2,160.
$52,000 × .01 = $520; $30,000 × .02 = $600; $13,000 × .08 = $1,040; total = $2,160
143.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.
$1,800 + ($600,000 × .02) – $5,600 = $8,200
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.
144.Refer to the information above. 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.
145.Refer to the information above. 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.
2% × $675,000 = $13,500
At the end of January, the unadjusted trial balance of Windsor, Inc. included the following accounts:
146.Refer to the information above. 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.
$7,400 – $800 = $6,600
147.Refer to the information above. 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.$331,800.
B.$340,000.
C.$332,600.
D.$347,400.
$340,000 – $7,400 = $332,600
148.Refer to the information above. 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.$9,200.
D.$7,200.
2% (.8 × $500,000) = $8,000
149.Refer to the information above. 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.
$340,000 – ($8,000 + $800) = $331,200
150.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.
$3,200 + (.02 × $350,000) – $2,900 = $7,300
At the end of March, the unadjusted trial balance of Tutor, Inc. included the following accounts:
