Question

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7. Selected accounts from Jim's Retail unadjusted trial balance at December 31, 2011, are as follows:

	DEBITS	CREDITS
Accounts Receivable	$1,000
Net Sales		$100,000

Assume also that there is a credit balance of $200 in the Allowance for Doubtful Accounts. If Jim's uses the allowance method, the entry to write off an account receivable balance of $40 would be:

		Bad Debts Expense $40    Allowance for Doubtful Accounts $40
		Bad Debts Expense $40    Accounts Receivable $40
		Allowance for Doubtful Accounts $40    Accounts Receivable $40
		Accounts Receivable $40    Allowance for Doubtful Accounts $40
		None of the above.

8.

You have the following information for BEST SALES for 2011 and 2010:

	2011	2010
Sales	$5,000,000	$800,000
Bad Debts Expense	100,000	40,000
Accounts Receivable (gross)	$400,000	$200,000	(Adjusted Balances at December 31)
Allowance for Bad Debts	10,000	20,000	(Adjusted Balances at December 31)

BEST SALES 2011 balance sheet information shows that:

		Gross receivables as of the balance sheet date are $500,000.
		Net realizable value of receivables as of the balance sheet date is $400,000.
		Net realizable value of receivables as of the balance sheet date is $410,000.
		Net realizable value of receivables as of the balance sheet date is $390,000.
		None of the above.

9.

You have the following information for BEST SALES for 2011 and 2010:

	2011	2010
Sales	$5,000,000	$800,000
Bad Debts Expense	100,000	40,000
Accounts Receivable (gross)	$400,000	$200,000	(Adjusted Balances at December 31)
Allowance for Bad Debts	10,000	20,000	(Adjusted Balances at December 31)

On the basis of the information provided for BEST SALES:

		Sales for 2011 were lower than those for 2010.
		The net realizable value of accounts receivable as of the year-end decreased from 2010 to 2011.
		For 2011, BEST SALES recorded bad debts expense totaling $100,000.
		Accounts receivable written off in 2011 totaled $10,000.
		None of the above.

Answer 1