Question

3) At January 1, Davidson Services has the following balances:

accounts receivable 9,000 allowance for uncollectible accounts 800 uncollectible accounts expense 0

During the year, Davidson has $104,000 of credit sales, collections of $100,000, and write-offs of $1,400.

Davidson records Uncollectible accounts expense at the end of the year using the percent-of-sales method, and applies a rate of 1.1%, based on past history.

Prior to the year-end entry to adjust the Uncollectible accounts expense, what is the balance in Accounts receivable?

A) $2,600

B) $11,600

C) $4,000

D) $13,000

4) At January 1, Everbright Sales has the following balances

Account receivable 18,000 allowance for uncollectible accounts 1,200 uncollectible accounts expense 0

During the year, Everbright has $150,000 of credit sales, collections of $140,000, and write-offs of $3,000. Everbright records Uncollectible accounts expense at the end of the year using the aging method. At the end of the year, the aging analysis produces a figure of $1,900, being the estimate of uncollectible accounts at end of year.

Before the year-end entry to adjust the Uncollectible accounts expense is made, what is the balance in the Uncollectible accounts expense?

A) Debit of $1,400

B) Credit of $1,944

C) Zero balance

D) Credit of $544

Answer 1

3.

Account receivable, January 1, balance	9000
Add: Credit sales	104000
Less: Collections	-100000
Less: Write offs	-1400
Balance in accounts receivable	11600

Therefore, prior to the year-end entry to adjust the Uncollectible accounts expense, the balance in Accounts receivable is $11,600.

The correct answer is B.

4.

Until the year-end entry to adjust the Uncollectible accounts expense is made, the balance in the Uncollectible accounts expense remains zero.

Therefore, before the year-end entry to adjust the Uncollectible accounts expense is made the balance in the Uncollectible accounts expense will be $0.

The correct answer is C. Zero balance