21) At year-end, the company\'s unadjusted trial balance shows accounts receivab

Question

21) At year-end, the company's unadjusted trial balance shows accounts receivable of $100,000, allowance for doubtful accounts of $400 (credit balance), and sales of $1,000,000. Uncollectibles are estimated to be 1% of sales. The year-end adjusting entry would include a debit to bad debt expense for which amount using the percent of sales method? a. $600 b. $1,000 c. $9,600 d. $10,000 22) At year-end, the company's unadjusted trial balance shows accounts receivable of $100,000, allowance for doubtful accounts of $400 (credit balance), and sales of $1,000,000. Uncollectibles are estimated to be 3% of accounts receivable. The year-end adjusting entry would include a debit to bad debt expense for which amount using the percent of receivables method? a. $2,600 b. $3,000 c. $3,400 d. $29,600 23) The Company enters into a 90-day note on March 16. When is the note due? a. June 1:3 b. June 14 c. June 15 d. June 16

Explanation / Answer

21)

Answer = D) $10,000

To record estimate of uncollectibles ($1,000,000 × 1%) = $10,000

Journal entry =

Bad debts expense debit 10000

Allowance for doubtful accounts Credit 10000

22)

Answer = a) $2600

To record estimate of uncollectibles

Debit to bad debt expense using percent of account receivable method = ($100,000 × 3%)-400 = $3000 - 400

= 2600

23) 90 days note on March 16, note due on June 14

Answer = B) June 14

Calculation = 15 days of March + 30 Days of april + 31 Days of May = 76 Days

90 -76 days = 14 Days

Therefore Note due on June 14

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