24. Prior to the adjusting entry for bad debt expense, Blueberry, Inc.\'s balanc

Question

24. Prior to the adjusting entry for bad debt expense, Blueberry, Inc.'s balances for Accounts Receivable and Allowances for Doubtful Accounts were $750,000 (debit) and $5,500 (credit), respectively. After the bad debt expense entry was posted, the net realizable value of accounts receivable was $675,000. Bad debt expense for the year a. was $86,000 b. was $69,500 c. was $75,000 d. was $80,500 e. cannot be determined from the information given The Trey Co. sells $75,000 of accounts receivable to a factor and receives 90% of the value of the factored accounts less a 15% commission based on the gross amount of factored accounts 25 receivable. The journal entry to record this factoring transaction will include: a. Debit Due from Factor $18,750 b. Credit Accounts Receivable $56,250 c. Credit Loss on Sale of Receivables $18,750 d. Debit Cash $75,000 e, Credit Accounts Receivable $75,000 26. On January 1, Magnus Corp makes a loan to MaybeCo and receives in exchange a three-year $10,000 note bearing interest at 10%. The market rate of interest for notes of similar risk is 12%. At the end of year 1, Magnus, adjusting entry will include a. Debit interest receivable $1,000 b. Debit discount on notes receivable $288 c. Debit interest expense $288 d. Credit interest income $1,142 e. Debit discount on notes receivable $695 Trainor Company estimates bad debt expense using a percentage of credit sales (5%). The company began its current year with an $8,500 balance in the allowance account. During the current year, $10,500 of accounts receivable were written off, and $1,200 of previously written off accounts were collected. Credit sales for the year were $255,000. The bad debt expense for the year was a. $10,500 b. $13,550 c. $12,750 d· $11,550 e. $22,050 27,

Explanation / Answer

As per chegg guidelines we answer one question per post. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Q24 Paticulars Amount Before bad debt expense : Account receivable                750,000.00 Allowance for doubtful account                     5,500.00 Net realisable value of account receivable                744,500.00 Net realisable value of account receivable after bad debt expense                675,000.00 Bad debt expense= 744500- 675000                  69,500.00 b) Bad debt expense was 69500

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