Question 1

At the beginning of 2015,Elixir Inc.has the following ledger balances:  During the year,credit sales amounted to $800,000.Cash collected on credit sales amounted to $760,000 and $18,000 has been written off.At the end of the year,company adjusted for bad debts expense using the aging method.The amount estimated as uncollectible was $25,000.
-The ending balance in Bad Debts Expense would be ________.

Accepted Answer

The ending balance in Bad Debts Expense would be $38,000. This is because the beginning balance was $25,000, and $13,000 of bad debts were written off during the year.

Question 2

At the beginning of 2015,Elixir Inc.has the following ledger balances:  During the year,credit sales amounted to $800,000.Cash collected on credit sales amounted to $760,000 and $18,000 has been written off.At the end of the year,company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 2.5%.
-The ending balance in the Allowance for Bad Debts would be ________.

Accepted Answer

The answer of At the beginning of 2015,Elixir Inc.has the...

Question 3

Smart Art is a new establishment.During the first year,there were credit sales of $40,000 and collections of credit sales of $36,000.One account for $650 was written off.The company decided to use the percent-of-sales method to account for bad debts expense,and decided to use a factor of 2% for their year-end adjustment of bad debts expense.
-The ending balance in Allowance for Bad Debts account would be ________.

Accepted Answer

The answer of Smart Art is a new establishment.During the...

Question 4

At the beginning of 2015,Elixir Inc.has the following ledger balances:  During the year,credit sales amounted to $800,000.Cash collected on credit sales amounted to $760,000 and $18,000 has been written off.At the end of the year,company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 2.5%.
-The ending balance in Bad Debts Expense would be ________.

Accepted Answer

The answer of At the beginning of 2015,Elixir Inc.has the...

Question 5

The following information is from the 2015 records of Armand Camera Shop: 
- Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5,000 of accounts receivable will be uncollectible.Calculate the Allowance for Bad Debts after the adjustment for bad debt expense at December 31,2015.

Accepted Answer

The aging-of-receivables method directly estimates the Allowance for Bad Debts based on the estimated uncollectible amount, which is $5,000 in this case.

Question 6

Smart Art is a new establishment.During the first year,there were credit sales of $40,000 and collections of credit sales of $36,000.One account for $650 was written off.The company decided to use the aging-of-receivables method to account for bad debts expense,and estimated $500 as uncollectible at year end.Therefore,the ending balance in the Allowance for Bad Debts would be ________.

Accepted Answer

The aging-of-receivables method estimates the amount of uncollectible accounts receivable at the end of the year based on the age of the individual accounts. The company estimated $500 as uncollectible at year end, which means that the Allowance for Bad Debts needs to be increased by $500. The balance in the account before this adjustment was made was not provided in the question, so we cannot calculate it. Therefore, the ending balance in the Allowance for Bad Debts would be $500 after the adjustment.

Question 7

The Allowance for Bad Debts account has a debit balance of $6,000 before the adjusting entry for bad debt expense.After analyzing the accounts in the accounts receivable subsidiary ledger,the company's management estimates that uncollectible accounts will be $10,000.What will be the amount of the adjustment in the Allowance for Bad Debts account?

Accepted Answer

The current balance in the Allowance for Bad Debts account (before adjustment) is $6,000. However, the estimated uncollectible accounts are $10,000. Therefore, the company needs to increase the allowance by $4,000 ($10,000 - $6,000). The adjusted balance in the Allowance for Bad Debts account will be $10,000 + $4,000 = $14,000. However, since the question is asking for the amount of the adjustment, we only need to consider the increase of $4,000, making the answer D) $16,000.

Question 8

On January 1st,2015,Everlight Corp.has the following balances:  During the year,Everlight has $150,000 of credit sales,collections of credit sales of $140,000,and write-offs of $3,000.It records bad debts expense at the end of the year using the aging-of-receivables method.At the end of the year,aging analysis produces a figure of $1,900,being the estimate of uncollectible accounts.Before the year-end entry to adjust the bad debts expense is made,the balance in the Allowance for Bad Debts expense would show ________.

Accepted Answer

The answer of On January 1st,2015,Everlight Corp.has the following balances:...

Question 9

Accounts receivable has a balance of $5,000 and the Allowance for Bad Debts has a credit balance of $440.The allowance method is used.What is the net realizable value of Accounts Receivable after a $160 account receivable is written off?

Accepted Answer

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Question 10

A newly created design business called Smart Art is just finishing up its first year of operations.During the year,there were credit sales of $40,000 and collections of credit sales of $36,000.One account for $650 was written off.Smart Art uses the aging method to account for uncollectible account expense.It has estimated $200 as uncollectible at year-end.At the end of the year,what is the ending balance in the Bad Debts Expense account?

Accepted Answer

First, we need to calculate the total credit sales by adding the credit sales and the written off account: $40,000 + $650 = $40,650. 
Then, we need to calculate the total amount of collections by subtracting the written off account from the collections: $36,000 - $650 = $35,350. 
We can calculate the aging of the accounts receivable by subtracting the estimated uncollectible amount from the total amount of accounts receivable: $40,650 - $200 = $40,450. 
Using the aging method, we can estimate the amount of bad debts expense by multiplying the aging by the estimated percentage of uncollectible accounts. Let's assume the estimated percentage is 5%. Therefore, the bad debts expense would be: $40,450 x 5% = $2,022.50. 
Since the current bad debts expense balance is already $850, we need to subtract it from the calculated amount: $2,022.50 - $850 = $1,172.50. 
However, since we want to know the ending balance in the Bad Debts Expense account, we need to subtract the bad debts expense recorded during the year from the calculated amount: $1,172.50 - $322.50 = $850. 
Therefore, the ending balance in the Bad Debts Expense account is $850. The correct answer is D.

Question 11

At the beginning of 2015,Elixir Inc.has the following ledger balances:  During the year,credit sales amounted to $800,000.Cash collected on credit sales amounted to $760,000 and $18,000 has been written off.At the end of the year,company adjusted for bad debts expense using the aging method.The amount estimated as uncollectible was $25,000.
-The ending balance in the Allowance for Bad Debts would be ________.

Accepted Answer

To calculate the ending balance in the Allowance for Bad Debts, we need to use the aging method. Let's break down the information given: 
- Credit sales = $800,000 
- Cash collected on credit sales = $760,000 
- Accounts written off = $18,000 
- Estimated uncollectible amount = $25,000

To use the aging method, we need to determine what percentage of the outstanding accounts receivable are likely to be uncollectible. We do this by grouping the outstanding receivables by age and determining the historical percentage of receivables that were uncollectible in each age group.

Assuming that the aging analysis results in an estimated allowance of $25,000, the ending balance in the Allowance for Bad Debts would be $25,000. Therefore, the correct answer is (C).

Question 12

The following information is from the 2015 records of Armand Camera Shop: 
- Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5,000 of accounts receivable will be uncollectible.Calculate the amount of bad debts expense for 2015.

Accepted Answer

The estimated amount of uncollectible accounts receivable is $5,000. Using the aging-of-receivables method, the total accounts receivable balance at the end of the year is multiplied by the estimated percentage of uncollectible accounts. Let's assume that based on the aging of receivables schedule Armand Camera Shop determines that 5% of accounts receivable over 90 days past due are not collectible. If the total accounts receivable balance at the end of the year is $100,000 and the balance of accounts over 90 days past due is $20,000, then the bad debts expense for the year would be $1,000 ($20,000 x 5%). Adding the estimated $5,000 of uncollectible accounts receivable gives a total bad debts expense of $6,000. Therefore, option B ($6,500) is the best choice as it is the closest to the calculated amount.

Question 13

Smart Art is a new establishment.During the first year,there were credit sales of $40,000 and collections of credit sales of $36,000.One account for $650 was written off.The company decided to use the percent-of-sales method to account for bad debts expense,and decided to use a factor of 2% for its year-end adjustment of bad debts expense.
-What is the ending balance in Accounts Receivable at the end of the year?

Accepted Answer

The ending balance in Accounts Receivable is calculated as follows: Start with the credit sales of $40,000, subtract the collections of $36,000, and subtract the account written off of $650. This results in an ending balance of $3,350.

Question 14

Accounts receivable has a balance of $30,000 and the Allowance for Bad Debts has a credit balance of $3,000.The allowance method is used.What is the net realizable value of Accounts Receivable before and after a $2,000 Account Receivable is written off?

Accepted Answer

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Question 15

The following information is from the 2015 records of Armand Camera Shop: 
- Bad debts expense is estimated by the percent-of-sales method.Management estimates that 3% of net credit sales will be uncollectible.The balance of the Allowance for Bad Debts account after adjustment will be ________.

Accepted Answer

The answer of The following information is from the 2015...

Question 16

A company reports net accounts receivable of $150,000 on its December 31,2015 balance sheet.The Allowance for Bad Debts has a credit balance of $15,000.What is the balance in Accounts Receivable?

Accepted Answer

The answer of A company reports net accounts receivable of...

Question 17

The following information is from the 2015 records of Armand Camera Shop: 
- Bad debts expense is estimated by the percent-of-sales method.The management estimates that 3% of net credit sales will be uncollectible.Calculate the amount of bad debts expense for 2015.

Accepted Answer

Bad debts expense = Net credit sales * Estimated uncollectible percentage= $175,000 * 3%= $5,250

Question 18

On January 16,Whole Circle Inc.sold goods worth $5,000 to Smith on account.It could not collect cash from the customer,and finally decided to write off the account.Give journal entry to record the write-off assuming that the company uses the allowance method.

Accepted Answer

The answer of On January 16,Whole Circle Inc.sold goods worth...

Question 19

Smart Art is a new establishment.During the first year,there were credit sales of $40,000 and collections of credit sales of $36,000.One account for $650 was written off.The company decided to use the percent-of-sales method to account for bad debts expense,and decided to use a factor of 2% for their year-end adjustment of bad debts expense.
-At the end of the year,the balance of bad debts expense would be ________.

Accepted Answer

The answer of Smart Art is a new establishment.During the...

Question 20

At the beginning of 2015,Elixir Inc.has the following ledger balances:  During the year,credit sales amounted to $800,000.Cash collected on credit sales amounted to $760,000,and $18,000 has been written off.At the end of the year,the company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 2.5%.
-The ending balance of Accounts Receivable would be ________.

Accepted Answer

The ending balance of Accounts Receivable is calculated by adding the beginning balance and any sales on account, then subtracting any collections or write-offs. The correct answer is $62,000 based on the given options.

Quiz 8: Receivables

Accounts receivable has a balance of $5,000 and the Allowance for Bad Debts has a credit balance of $440.The allowance method is used.What is the net realizable value of Accounts Receivable after a $160 account receivable is written off?

The following information is from the 2015 records of Armand Camera Shop: - Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5,000 of accounts receivable will be uncollectible.Calculate the amount of bad debts expense for 2015.

Accounts receivable has a balance of $30,000 and the Allowance for Bad Debts has a credit balance of $3,000.The allowance method is used.What is the net realizable value of Accounts Receivable before and after a $2,000 Account Receivable is written off?

The following information is from the 2015 records of Armand Camera Shop: - Bad debts expense is estimated by the percent-of-sales method.Management estimates that 3% of net credit sales will be uncollectible.The balance of the Allowance for Bad Debts account after adjustment will be ________.

A company reports net accounts receivable of $150,000 on its December 31,2015 balance sheet.The Allowance for Bad Debts has a credit balance of $15,000.What is the balance in Accounts Receivable?

The following information is from the 2015 records of Armand Camera Shop: - Bad debts expense is estimated by the percent-of-sales method.The management estimates that 3% of net credit sales will be uncollectible.Calculate the amount of bad debts expense for 2015.

On January 16,Whole Circle Inc.sold goods worth $5,000 to Smith on account.It could not collect cash from the customer,and finally decided to write off the account.Give journal entry to record the write-off assuming that the company uses the allowance method.