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Exam 9: Receivables

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Question 81

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At the end of the current year, Accounts Receivable has a balance of $750,000; Allowance for Doubtful Accounts has a debit balance of $6,200; and sales for the year total $3,500,000. Bad debt expense is estimated at ½ of 1% of sales.?Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

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Question 82

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Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment) . The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to record the bad debt expense for the year?

A) debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200
B) debit Allowance for Doubtful Accounts, $34,200; credit Bad Debt Expense, $34,200
C) debit Allowance for Doubtful Accounts, $29,600; credit Bad Debt Expense, $29,600
D) debit Bad Debt Expense, $29,600; credit Allowance for Doubtful Accounts, $29,600

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Question 83

Multiple Choice

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What is the type of account and normal balance of Allowance for Doubtful Accounts?

Allowance for Doubtful Accounts is a liability account.

Journalize the following transactions of Upton Drugs:July 8Received a $180,000, 90-day, 8% note dated July 8 from Miracle Chemical on account.Oct. 6The note is dishonored by Miracle Chemical.Nov. 5Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Miracle Chemical on October 6.

Days' sales in receivables

A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is

When a company uses the allowance method of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include a

The maturity value of a 12%, 60-day note for $5,000 is $5,600.

The equation for computing interest on an interest-bearing note is as follows: Interest = Maturity Value × Interest Rate × Time.

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.​Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account

Other receivables include nontrade receivables such as loans to company officers.

Match each description to the appropriate term (a-h) . -The time between the date a note is issued and the due date of the note

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment) , and bad debt expense is estimated at 3% of credit sales. If credit sales are $300,000, the amount of the adjusting entry to record the estimated uncollectible accounts receivable

On the balance sheet, the amount shown for Allowance for Doubtful Accounts is equal to the

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Days' sales in receivables is an estimate of the length of time the accounts receivable have been outstanding.

At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, previously written off accounts of $120 are reinstated and accounts totaling $740 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be