Question 7. Using percentage of receivable method, the estimated uncollectible a

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Question 7.

Using percentage of receivable method, the estimated uncollectible accounts are $ 25000. If the balance of allowance for doubtful accounts is $ 8000 debit before adjustment, what is the amount of bad debt expense for the period?

$ 25000

$ 8000

$ 33000

$ 17000

Question 8.

Using theallowance method, the uncollectible for the year is estimated to be $ 28000. If the balance of allowance for doubtful is a credit $ 7000 before adjustment,what is the bad debt expense for the period?

$ 7000

$ 21000

$ 28000

$ 35000

Question 9.

Data: accounts receivable $ 800000<br>allowance doubtful $ 50000 before adjustment<br>allowance for doubtful $ 65000 after adjustment<br>What is net realizable value of accounts receivable at end of period?

$ 685000

$ 750000

$ 800000

$ 735000

Question 10.

An account actually written off as uncollectible under the allowance method has the following entry

debit bad debt expense
credit allowance for doubtful

debit allowance fordoubtful
credit bad debt expense

debit allowance for doubtful
credit accounts receivable

debit bad debt expense
credit accounts receivable

chapter 9B

plant assets are often subdivided into four groups. Which of the follwoing would not be classified as a plant asset?

land

land improvements

supplies

buildings

Question 4.

Schopenhauer company purchased a delivery truck and incurred the following costs:
cash price $15,000
sales tax 750
painting 600
motor vehicle license 75
2-year accident insurance policy 700
TOTAL COSTS $17,125
what amount should be recorded as the cost of the delivery truck?

$15,750

$16,350

$16,425

$17,125

QUESTION 5

using the straight-line method, depreciation expense is calculated with the formula;

(cost / useful life) - Salvage value

(cost + salvage value) / useful life

(cost- salvage value) / useful life

(cost / useful life ) + salvage value

QUESTION 6

Bruno company purchased equipment on january 1, 2002 at a total invoice cost of $280,000; additional costs of $5,000 for freight and $25,000 for installation were incurred. the equipment has an estimated salvage value of $10,000 and an estimated useful life of five years. the amount of accumulated depreciation at end of year two on December 31, 2003 if the straight-line method of depreciation is used is

$108,000

$110,000

$120,000

$124,000

QUESTION 7

Spinoza enterprises purchased a truck for $ 27,000 on January 1, 2002. the truck will have an estimated salvage value of $2,000 at the end of five years. using the units of activity method, the accumulated depreciation at December 31, 2003 can be computed by the following formula

($27,000 / total estimated activity) X Units of activity for 2003

($25,000 / total estimated activity) X Units of activity for 2003

($27,000 / total estimated activity) X Units of activity for 2002 and 2003

($25,000 / total estimated activity) X Units of activity for 2002 and 2003

QUESTION 8

Nietzsche comapny purchased a machine on january 1, 2002 for $350,000. the machine has an estimated useful life of five years and a salvage value of $50,000. The machine is being depreciated using the double-declining balance method. the book value at end of year two on December 31, 2003 is

$126,000

$158,000

$170,000

$224,000

QUESTION 9

Santayana Company purchased a machine on january 1, 2000, for $8,000 with an estimated salvage value of $2,000 and an estimated useful life of 8 years. However. on january 1, 2000, santayana decides the machine will last 12 years from the date of purchase. the salvage value is still estimated at $2,000. Using the straight-line method the annual depreciation will be

$450

$500

$600

$667

QUESTION 10

Which of the following would be considered an ordinary repair?

constructing a new wing on a building

a major motor overhaul of a new truck

painting of buildings

replacing a stairway with an escalator

QUESTION 11

Which of the following is an example of a plant asset disposal?

retirement

sale

exchange

all of the above are examples

QUESTION 12

A plant asset cost $27,000 when it was purchased on January 1, 1995. it was depreciated by the straight-line method based on a 9-year life with no salvage value. On June 30, 2002, the asset after seven and a half years with an accumulated depreciation of ______was discarded or disposed with no cash received. what gain or loss should be recognized on the retirement?

no gain or loss

$6,000 loss

$4,500 loss

$3,000 gain

QUESTION 13

On january 1, Averroes Company sold a machine that had a book value of $7,500 for $8,000 cash. the entry by Averroes company on january 1, will include a:

debit to loss on disposal

credit to loss on disposal

debit to gain on disposal

debit to cash

$ 25000

$ 8000

$ 33000

$ 17000

Explanation / Answer

Question 7. Using percentage of receivable method, the estimated uncollectible a

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