4,000 uncollectible account. Before an entry to the balance in the allowance acc
ID: 2330409 • Letter: 4
Question
4,000 uncollectible account. Before an entry to the balance in the allowance account was $ 4,500 entry to write-offa this entry was the year, ADC Inc made The ofaccounts reeeivable ather the write-off entry was a 560 000 551,500 Daring net realizable lance in acounts recel able was $ 60,000 and the balance in b) 550 50 d) 5sss00 1.mulated dereyr the carrying amount of the asset through operations bThe firm can no longer fully recover the carryin c) Accumulated depreciation plus salvage value 100- An asset is impaired when depreciation exceeds acquisition costs The present value of future re cash flows exceeds the carrying amount of the asset d) flowsExplanation / Answer
99 - Correct answer is D.
100 - Correct answer is B.
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Allowance for bad debt = 4500
Bad debt written off = 4000
Credit balance in allowance for bad debts = 4500 - 4000 = 500
Balance in bills receivables account = ($60000 – $4000) – (4500 - 4000)
= 56000 – 500
= 55500
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The asset is said to be impaired when future cash flow from the asset is lower than the carrying value of the asset. That mean carrying value of the asset can never be recovered through continued operation.
So correct option is B.
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