An aging of a company’s accounts receivable indicates that $14,000

Question 1

An aging of a company’s accounts receivable indicates that $14,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a

 

 

[removed]

credit to Allowance for Doubtful Accounts for $14,000.

 

 

 

[removed]

debit to Bad Debt Expense for $12,900.

Question 2

A company has net credit sales of $750,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If Allowance for Doubtful Accounts has a credit balance of $2,000 prior to adjustment, its balance after adjustment will be a credit of

 

 

 

 

 

Question 3

The maturity value of a $50,000, 9%, 60-day note receivable dated July 3 is

 

 

 

 

 

uestion 4

Reck Company receives a $15,000, 3-month, 8% promissory note from Fey Company in settlement of an open accounts receivable. What entry will Reck Company make upon receiving the note?

 

 

[removed]

Notes Receivable

 

15,000

   

Interest Receivable

 

300

   
 

Accounts Receivable—Fey Company

     

15,000

 

Interest Revenue

     

300

 

[removed]

Notes Receivable

 

15,000

   
 

Accounts Receivable—Fey Company

     

15,000

           

 

[removed]

Notes Receivable

 

15,300

   
 

Accounts Receivable—Fey Company

     

15,000

 

Interest Revenue

     

300

 

[removed]

Notes Receivable

 

15,300

   
 

Accounts Receivable—Fey Company

     

15,300

           

Question 5

Gagner Clinic purchases land for $175,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?

 

 

 

 

 

Question 6

Carey Company buys land for $50,000 on 12/31/13. As of 3/31/14, the land has appreciated in value to $50,700. On 12/31/14, the land has an appraised value of $51,800. By what amount should the Land account be increased in 2014?

 

 

 

 

 

Question 7

Engler Company purchases a new delivery truck for $55,000. The sales taxes are $4,000. The logo of the company is painted on the side of the truck for $1,600. The truck license is $160. The truck undergoes safety testing for $290. What does Engler record as the cost of the new truck?

 

 

 

 

 

Question 8

A company purchased factory equipment on April 1, 2014 for $160,000. It is estimated that the equipment will have a $20,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014 is

 

 

 

 

 

Question 9

A factory machine was purchased for $375,000 on January 1, 2014. It was estimated that it would have a $75,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2014. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2014 would be

 

 

 

 

 

Question 10

Farr Company purchased a new van for floral deliveries on January 1, 2014. The van cost $56,000 with an estimated life of 5 years and $14,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 2015?