QUESTION 1 At the end of January, the unadjusted trial balance of Fred, Inc, inc
ID: 2548070 • Letter: Q
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QUESTION 1 At the end of January, the unadjusted trial balance of Fred, Inc, included the following accounts Credit $130,000 Debit Sales (80% represent credit sales) Accounts Receivable Allowance for Doubtful Accounts $110,000 880 Fred estimates bad debts expense to be 2% of credit sales. What is the amount of Bad Debts expense recognized in Fred's income statement for A. $1,520 $2,200 $3,000 $2,400 C. D. QUESTION 2 At the end of January, the unadjusted trial balance of Fred, Inc, included the following accounts: Credit $150.000 Debit Sales (80% represent credit sales) . $110,000 Allowance for Doubtful Accounts 880 Fred ages the accounts receivable and determines the estimated uncollectible portion to be $2,800. After the adjusting entry is made, the net realizable value of Fred's accountsreceivable in the January 31 balance sheet is: A $107.200 $106,320 C.$108,080 $109,120 QUESTION 3 Noah Sales uses a periodic inventory system. The beginning inventory was $20,000, purchases amounted to $110,000, sales totaled $215,000, and the year-end inventory was $25,000. The cost of goods sold must have been: A $105,000 B.$110,000 C.$100,000 D. Some other amount QUESTION 4 Newark Company has provided the following information: Cash sales, $450,000 Credit sales, $1,350,000 Selling and administrative expenses, $330,000 Sales returns and allowances, $90,000 Gross profit, $1,360,000 Increase in accounts receivable, $55,000 Wage expense, $33,000 Sales discounts, $43,000 Net income, $1,030,000 How much are Newark's gross sales? $1,745,000. $1,634,000. $1,667,000. $1,800,000.Explanation / Answer
1.
Credit sales = Sales * 80%
= 150,000 * 80%
= 120,000
Bad debt expense = Credit sales * 2%
= 120,000 * 2%
= 2,400
The answer is D
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2.
Net realizable value of Accounts receivable = Accounts receivable - Allowance for uncollectibles
= 110,000 - 2,800
= 109,120
The answer is D
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3.
Cost of goods sold = Beginning inventory + Purchases - Ending inventory
= 20,000 + 110,000 - 25,000
= 105,000
The answer is A
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4.
Gross sales = Cash sales + Credit sales
= 450,000 + 1,350,000
= 1,800,000
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