Question

Help me please!

An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $5,927. If Allowance for Doubtful Accounts has a $1,220 debit balance, the adjustment to record the bad debt expense for the period will require a

Select the correct answer.

a. debit to Bad Debt Expense for $5,927.

b. debit to Bad Debt Expense for $1,220.

c. credit to Allowance for Doubtful Accounts for $5,927.

d. debit to Bad Debt Expense for $7,147.

Allowance for Doubtful Accounts has a debit balance of $453 at the end of the year (before adjustment), and Bad Debt Expense is estimated at 3% of sales. If net sales are $940,100, the amount of the adjusting entry to record the estimate of the uncollectible accounts is

a. $28,656

b. $27,750

c. $453

d. $28,203

An asset was purchased for $128,000.00 on January 1, Year 1 and originally estimated to have a useful life of 8 years with a residual value of $9,500.00. At the beginning of the third year, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,200.00. Calculate the third-year depreciation expense using the revised amounts and straight line method.

Select the correct answer.

$25,043.75

$24,043.75

$23,043.75

$24,543.75

Answer 1

Answers

• Question #1

--Correct Answer = Option ‘D” Debit to Bad Debt expense for $ 7,147

Adjusted balance required in Allowance account	$5,927	Credit
Actual unadjusted balance of Allowance account	$1,220	Debit
Bad Debt Expense	$7,147	[$ 1220 for clearing debit balance PLUS $ 5927 for making balance credit]

• Question #2

--Correct Answer = Option ‘d’ $ 28,203

Net Sales	$940,100
Bad Debt expense rate	3% of net sales
Amount of adjusting entry [940100 x 3%]	$28,203

• Question #3

--Correct Answer = Option #2: $ 24,043.75

A	Cost	$           128,000.00
B	Residual Value	$                9,500.00
C=A - B	Depreciable base	$           118,500.00
D	Life [in years]	8
E=C/D	Annual SLM depreciation	$              14,812.50
F = Ex 2	2 Year accumulated depreciation	$              29,625.00
G = A - F	Book Value at the time of revision	$              98,375.00
H	Revised residual value	$                2,200.00
I = G - H	New Depreciable base	$              96,175.00
J	New remaining life	4
K = I/J	New revised depreciation expense from 3rd year	$              24,043.75