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Exam 9: Receivables

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Question 71

Multiple Choice

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Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment) ,and an analysis of customers' accounts indicates uncollectible receivables of $19,700.Which of the following entries records the proper adjustment for bad debt expense?

A) debit Allowance for Doubtful Accounts, $17,600; credit Bad Debt Expense, $17,600
B) debit Allowance for Doubtful Accounts, $21,800; credit Bad Debt Expense, $21,800
C) debit Bad Debt Expense, $21,800; credit Allowance for Doubtful Accounts, $21,800
D) debit Bad Debt Expense, $17,600; credit Allowance for Doubtful Accounts, $17,600

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Question 72

Multiple Choice

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Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment) ,and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000.Which of the following entries records the proper adjusting entry for bad debt expense?

A) debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600
B) debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400
C) debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600
D) debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600

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Question 73

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At the end of the current year,Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $3,500,000.Bad debt expense is estimated at ½ of 1% of net 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.

Discount Mart utilizes the allowance method of accounting for uncollectible receivables.On December 12,the company receives a $550 check from Chad Thomas in settlement of Thomas's $1,100 outstanding accounts receivable.Due to Thomas's failing health,he is closing his company and is expecting to make no further payments to Discount Mart.Journalize this transaction.

Journalize the following transactions for Scott Company:Nov.4 Received a $6,500,90-day,6% note from Michael Tims in payment of his account.Dec.31 Accrued interest on the Tims note.Feb.2 Received the amount due from Tims on his note.

Indications that an account may be uncollectible include all of the following except the customer

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

Mr.Potts issued a 90-day,7% note for $200,000,dated February 3 to Valley Co.on account. (Assume a 360-day year when calculating interest.) (a) Determine the due date of the note. (b) Determine the interest. (c) Determine the maturity value of the note. (d) Journalize the entry to record the receipt of the note from Potts on February 3. (e) Journalize the entry to record the receipt of payment of the note at maturity by Valley Co.

When the allowance method is used to account for uncollectible accounts,Bad Debt Expense is debited when

Match each description to the appropriate term (a-d) . Each term may be used more than once. -This method is most often used by small companies with few receivables.

Blackwell Industries received a 120-day,9% note for $180,000,dated August 10 from a customer on account.Required

Journalize the following transactions of Upton Drugs:

Match each description to the appropriate term (a-i) . -Amounts owed by customers documented by a formal written instrument of credit

If collection of another receivable is expected beyond one year,it is classified as a (n)

Dalton Company uses the allowance method to account for uncollectible receivables.Dalton has determined that the Irish Company account is uncollectible.To write off this account,Dalton should debit

Match each description to the appropriate term (a-h) . -The stated rate charged for using the money of another party

Allowance for Doubtful Accounts is a liability account.

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a credit balance of $5,000.The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000.The amount to be recorded in the adjusting entry for the bad debt expense is $45,000.

Notes Receivable and Accounts Receivable can also be called trade receivables.

Other than Accounts Receivable and Notes Receivable,name other receivables that might be included in the general ledger.