Question

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

= Evvv 15. A company has an ending accounts receivable balance of $1,800,000 and it estimates that uncollectible accounts will be 2% of the receivable balance. If Allowance for Doubtful Accounts has a credit balance of $4,000 prior to adjustment, its balance after adjustment will be a credit of A) $40,000 B) $36,000 C) $35,920. D) $32,000. 16. Smithson Corporation's unadjusted trial balance includes the following balances (assume normal balances): • Accounts Receivable $1,119,000 • Allowances for Doubtful Accounts $ 21,300 Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record? A) $67,140 B) $45,840 C) $44,562 D) $68,418 17. The interest on a $20,000, 6%, 60-day note receivable is A) $1,200. B) $200. C) $400. D) $600. 18. The interest on a $10,000,9%, 90-day note receivable is A) $225. B) $900. C) $75. D) $150.

Answer 1

Solution:

15. The company has an ending accounts receivable balance of $1,800,000 and bad debts are 2% of the receivable balance.

So to adjust the allowance for the new estimate, we will debit the bad debt expense of 2% of 1,800,000 = $36,000 and credit the allowance for doubtful account with $36,000.

So the correct option is (b) $36,000.

16. The amount of bad debt expense would be = Bad debts - allowance for doubtful accounts

Bad debt expense = 6%of $1,119,000 - $21,300 = $67,140 - $21,300 = $45,840

So the correct option is (b) $45,840.

17. The interest on a $20,000, 6%, 60-days note receivable is :

Interest = Principal*Interest rate*Frequency of a year

Interest= $20,000*6%*60/360 days = $200

So the option (b) $200 is the correct answer.

18. The interest on a $10,000, 9%, 90-days note receivable is :

Interest = Principal*Interest rate*Frequency of a year

Interest= $10,000*9%*90/360 days = $225

So the option (a) $225 is the correct answer..