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7 - 18
83.
84.
85.
At the close of its first year of operations, December 31, 2012, Ming Company had
accounts receivable of $1,080,000, after deducting the related allowance for doubtful
accounts. During 2012, the company had charges to bad debt expense of $180,000 and
wrote off, as uncollectible, accounts receivable of $80,000. What should the company
report on its balance sheet at December 31, 2012, as accounts receivable before the
allowance for doubtful accounts?
a. $1,340,000
b. $1,180,000
c. $980,000
d. $880,000
86.
Before year-end adjusting entries, Dunn Company's account balances at December 31,
2012, for accounts receivable and the related allowance for uncollectible accounts were
$1,200,000 and $90,000, respectively. An aging of accounts receivable indicated that
$125,000 of the December 31 receivables are expected to be uncollectible. The net
realizable value of accounts receivable after adjustment is
a. $1,165,000.
b. $1,075,000.
c. $985,000.
d. $1,110,000.
87.
During the year, Kiner Company made an entry to write off a $16,000 uncollectible
account. Before this entry was made, the balance in accounts receivable was $200,000
and the balance in the allowance account was $18,000. The net realizable value of
accounts receivable after the write-off entry was
a. $200,000.
b. $198,000.
c. $166,000.
d. $182,000.
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Cash and Receivables
88.
7 - 19
$ 16,000
800,000
18,000
As a result of a review and aging of accounts receivable in early January 2013, however,
it has been determined that an allowance for doubtful accounts of $11,000 is needed at
December 31, 2012. What amount should Murphy record as "bad debt expense" for the
year ended December 31, 2012?
a. $9,000
b. $11,000
c. $13,000
d. $27,000
Use the following information for questions 89 and 90.
A trial balance before adjustments included the following:
Debit
Sales
Sales returns and allowance
Accounts receivable
Allowance for doubtful accounts
Credit
$850,000
$28,000
86,000
1,520
89.
If the estimate of uncollectibles is made by taking 2% of net sales, the amount of the
adjustment is
a. $13,400.
b. $16,440.
c. $17,000.
d. $19,480.
90.
If the estimate of uncollectibles is made by taking 10% of gross account receivables, the
amount of the adjustment is
a. $7,080.
b. $8,600.
c. $8,448.
d. $10,120.
91.
$80,000
4,800
3,200
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7 - 20
92.
Smithson Corporation had a 1/1/12 balance in the Allowance for Doubtful Accounts of
$20,000. During 2012, it wrote off $14,400 of accounts and collected $4,200 on accounts
previously written off. The balance in Accounts Receivable was $400,000 at 1/1 and
$480,000 at 12/31. At 12/31/12, Smithson estimates that 5% of accounts receivable will
prove to be uncollectible. What is Bad Debt Expense for 2012?
a. $4,000.
b. $14,200.
c. $18,400.
d. $24,000.
93.
Black Corporation had a 1/1/12 balance in the Allowance for Doubtful Accounts of
$18,000. During 2012, it wrote off $12,960 of accounts and collected $3,780 on accounts
previously written off. The balance in Accounts Receivable was $360,000 at 1/1 and
$432,000 at 12/31. At 12/31/12, Black estimates that 5% of accounts receivable will prove
to be uncollectible. What should Black report as its Allowance for Doubtful Accounts at
12/31/12?
a. $8,640.
b. $8,820.
c. $12,420.
d. $21,600.
94.
$120,000
7,200
4,800
Vasguez Corporation had a 1/1/12 balance in the Allowance for Doubtful Accounts of
$30,000. During 2012, it wrote off $21,600 of accounts and collected $6,300 on accounts
previously written off. The balance in Accounts Receivable was $600,000 at 1/1 and
$720,000 at 12/31. At 12/31/12, Vasguez estimates that 5% of accounts receivable will
prove to be uncollectible. What is Bad Debt Expense for 2012?
a. $6,000.
b. $21,300.
c. $27,600.
d. $36,000.
96.
McGlone Corporation had a 1/1/12 balance in the Allowance for Doubtful Accounts of
$25,000. During 2012, it wrote off $18,000 of accounts and collected $5,250 on accounts
previously written off. The balance in Accounts Receivable was $500,000 at 1/1 and
$600,000 at 12/31. At 12/31/12, McGlone estimates that 5% of accounts receivable will
prove to be uncollectible. What should McGlone report as its Allowance for Doubtful
Accounts at 12/31/12?
a. $12,000.
b. $12,250.
c. $17,250.
d. $30,000.