39 flyer company has provided the following information prior to any year end bad de 4314195

39.Flyer Company has provided the following information prior to any year-end bad debt adjustment:

• Cash sales, $150,000

• Credit sales, $450,000

• Selling and administrative expenses, $110,000

• Sales returns and allowances, $30,000

• Gross profit, $490,000

• Accounts receivable, $110,000

• Sales discounts, $14,000

• Allowance for doubtful accounts credit balance, $1,200

Flyer estimates bad debt expense assuming that 1.5% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded? 

A. $7,950.

B. $6,750.

C. $5,550.

D. $7,800.

40.Which of the following is correct when bad debt expense is recorded at year-end? 

A. Current assets will increase.

B. Gross profit will decrease.

C. Income from operations will decrease.

D. Current liabilities will decrease.

41.Which of the following statements is false? 

A. The journal entry to record bad debt expense decreases current assets.

B. The journal entry to record bad debt expense decreases retained earnings.

C. The journal entry to write off an uncollectible account receivable decreases operating income.

D. The journal entry to write off an uncollectible account receivable does not affect current assets.

42.Which of the following journal entries correctly records bad debt expense? 

A. Bad debt expensexxx

B. Allowance for doubtful accountsxxx

C. Allowance for doubtful accountsxxx

D. Bad debt expensexxx

43.Which of the following journal entries correctly records the write off of an uncollectible account receivable when using the allowance method? 

A. Bad debt expensexxx

B. Allowance for doubtful accountsxxx

C. Allowance for doubtful accountsxxx

D. Bad debt expensexxx

44.The CHS Company has provided the following information:

• Accounts receivable written-off as uncollectible during the year amounted to $11,500.

• The accounts receivable balance at the beginning of the year was $150,000.

• The accounts receivable balance at the end of the year was $210,000.

• The allowance for doubtful accounts balance at the beginning of the year was $14,000.

• The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $12,900.

• Credit sales during the year totaled $900,000.

How much was CHS Company's bad debt expense? 

A. $11,500.

B. $12,900.

C. $10,400.

D. $14,000.

45.The CHS Company has provided the following information:

• Accounts receivable written-off as uncollectible during the year amounted to $11,500.

• The accounts receivable balance at the beginning of the year was $150,000.

• The accounts receivable balance at the end of the year was $210,000.

• The allowance for doubtful accounts balance at the beginning of the year was $14,000.

• The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $12,900.

• Credit sales during the year totaled $900,000.

How much cash was received from collections of accounts receivable? 

A. $888,500.

B. $828,500.

C. $690,000.

D. $701,500.

46.Superior Company has provided you with the following information before any year-end adjustments:

Net credit sales are $120,000.

Historical percentage of credit losses is 2%.

Allowance for doubtful accounts has a credit balance of $300.

Accounts receivables ending balance is $47,000.

What is the estimated bad debt expense using the percentage of credit sales method? 

A. $2,100.

B. $2,400.

C. $940.

D. $2,700.

47.Which of the following statements is correct? 

A. The journal entry to record bad debt expense requires a debit to bad debt expense and a credit to accounts receivable.

B. The journal entry to record bad debt expense requires a debit to bad debt expense and a credit to allowance for doubtful accounts.

C. The journal entry to record the write off of an uncollectible account receivable requires a debit to bad debt expense and a credit to accounts receivable.

D. The journal entry to record the write off of an uncollectible account receivable requires a debit to bad debt expense and a credit to allowance for doubtful accounts.

48.Clark Company estimated the net realizable value of its accounts receivable as of December 31, 2016, to be $165,000, based on an aging schedule of accounts receivable. Clark has also provided the following information:

• The accounts receivable balance on December 31, 2016 was $175,000.

• Uncollectible accounts receivable written off during 2016 totaled $12,000.

• The allowance for doubtful accounts balance on January 1, 2016 was $15,000.

How much is Clark's 2016 bad debt expense? 

A. $10,000.

B. $7,000.

C. $13,000.

D. $3,000.

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