Question

11)A company has the following schedule through the aging of accounts receivable outstanding to estimate its bad debt: No. of Days Qutstanding 0-30 days 31-60 days Over 60 days Probability of Collection .98 Amount $150,000 100, 000 50,000 .90 .80 What is its bad debt expense if the Allowance for Doubtful Accounts has a debit balance of $5,000 before any adjustment? $18,000 $28,000. $272,000. $282,000. a. b. с. d. 12) Windward Corporation's books disclosed the following information for the year ended December 31, 2014: Net credit sales Net cash sales $1,500,000 240,000 200,000 400,000 Accounts Receivable at beginning of year Accounts Receivable at end of year Windward's accounts receivable turnover is 3.75 times a. b. 4.35 times 5.00 times C. 5.80 times

Answer 1

Answers

• Answer #11
  Correct Answer = Option ‘B’ $ 28,000

Number of Days	Receivables
Past Due	Amount	% uncollectible	Uncollectible amount
0-30	$150,000	2%	$3,000
31-60	$100,000	10%	$10,000
Over 60	$50,000	20%	$10,000
Adjusted balance required of Allowance for Doubtful Account (A)			$23,000
Unadjusted balance in the Allowance account (B) - Credit (Debit)			($5,000)
Bad Debt expense : (A - B)			$28,000

• Answer #12
  >Average receivables = ($200000 + 400000) / 2 = $ 300,000
  >Account receivables turnover = Net credit sale / Average receivables
  = $ 1500000 / 300000
  = 5 times

>Correct Answer = Option ‘C’ 5.00 times