1. The allowance method of accounting for uncollectible accounts: a. emphasizes
ID: 2519618 • Letter: 1
Question
1. The allowance method of accounting for uncollectible accounts:
a. emphasizes the matching of expenses with revenues
b. does not match up the sales revenues and bad debt expense in the same period
c. is not used by most companies who sell merchandise on account
d. is not generally accepted as a basis for financial reporting
2. ABC company has outstanding receivables of $45,000 and discovers a $500 account is uncollectible. If they use the direct-write off method, what entry would they make?
3. Button company purchases land for $90,000 cash. Button assumes $2,500 in property taxes due on the land. The title and attorney dees totaled $1,000. Button has the land graded for $2,200. They paid $10,000 for paving of the parking lot. They also paid an architect a fee of $15,000 to design a new office building that will go on the site. What amount does Burke record as the cost of the land?
a. $93,200 b.105,700 c. 95,700 d.120,700
4. The following totals for the month of May were taken from the payroll records of Yang Company.
Total Salaries-$60,000
FICA Taxes Withheld- $4590
Income Taxes Withheld: $12,500
The journal entry to record the monthly payroll accrual on May 30 would be??
Explanation / Answer
1 The allowance method of accounting for uncollectible accounts emphasizes the matching of expenses with revenues 2 Bad debts expense 500 Accounts receivable 500 3 Cost of the land = 90000+2500+1000+2200= $95700 4 Salaries and wages expense 60000 FICA Taxes payable 4590 Income Taxes payable 12500 Salaries and wages payable 42910
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