Question

please help with these accounting problems! all questions please and thank you!

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 Allowance for Doubtful Accounts 10,000 B) Bad Debts Expense 7,500 Allowance for Doubtful Accounts C) Bad Debts Expense Accounts Receivable 7,500 D) Bad Debts Expense 10,000 Accounts Receivable 10,000 7,500 7,500 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 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

Answer 1

11.B...Bad debts expense a/c.......$7,500.

...................To allowance for doubtful accounts 7,500...

amount = $250,000 *4%) - 2500 existing credit balance =>$7,500.

12.A.$55,000.

after adjustment amount will equal the estimated uncollectible accounts amount of $55,000.

The amount to be adjusted will be = 55,000 + 11,000 debit balance =>66,000.

13.A.45,000.

after adjustment amount will equal the estimated uncollectible accounts amount of $45,000.

14.A$28,000.

Cash receivable would remain the same, since write off will be charged to allowance for doubtful debts.