Question

please help with all these accouting multiple choice problems!

A Ap X Aa A A Timesew... 12 Sensitivity Styles Paragraph x A e A B U 11. Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $250,000 and credit sales are $1,000,000. Management estimates that 4 % of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? A) Bad Debts Expense 10,000 10,000 Allowance for Doubtful Accounts 7,500 B) Bad Debts Expense 7,500 Allowance for Doubtful Accounts 7,500 C) Bad Debts Expense 7,500 Accounts Receivable 10,000 D) Bad Debts Expense 10,000 Accounts Receivable 12. Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $55,000. If the balance of the Allowance for Doubtful Accounts is $11,000 debit before adjustment, what is the balance after adjustment? A) $55,000 B) $11,000 C) $66,000 D) $44,000 13. Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is $6,000 debit before adjustment, what is the balance after adjustment? A) $45,000 B) $51,000 C) $39,000 D) $6,000 I 14. In reviewing the accounts receivable, the cash receivable value is $28,000 before the write-off of a $2,000 account. What is the cash receivable value after the write-off? A) $28,000 B) $2,000 C) $30,000 D) $26,000 100% Focus ge 3 of 6 1032 words by Pharos@ 1990

Answer 1

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11) Answer is Option b. As the total accounts receivable balance is $250,000, Estimated & is 4% So $250,000 X4% = $10,000 will be bad debts, But, before adjustment, $2,500 is already present in Allowance for Doubtful accounts as Crbal, so, 67,500 will be the net effects Entry will be; Bad Debt exp Ale To Allowance Ale Dr $7,500 - – $7,500 12 Answer is Option C. Bad Debt expense is $55000 the balance is Drbal in Allowance Ale of 11,000, so expence will be $66,000 [$55,000 + $ 11,000] 13 Answer is Option C. Bad Debt expense is $45,000 the balance is Crbal in Allowance Ale of $6,000, so expense will be $39,000 [$45,000 A $6,000] 14 Answer is Option A. Writing off a account will not affect the Cash Realisable Value THANK YOU