Question

32-34. The general ledger shows Accounts Receivable $100,000 and the Allowance for Doubtful Accounts $ 5,000. Sales were $1,000,000 which included credit sales of $800,000. The following three questions are independent of each other: 32. If the company wrote off an account as uncollectible for $500, the accounts receivable net realizable value after the write-off would be: a. $94,500. b. $95,000. c. $99,500. d. Some other amount. 33. If the determination of bad debts was based on 1% of credit sales, the bad debt expense for the year would be: a. $10,000 b. $ 8,000. c. $ 1,000. d. Some other amount. 34. If the determination of bad debts was based on 10% of accounts receivable, the bad debt expense for the year would be: a. $10,500. b. $10,000. c. $ 5,000. d. Some other amount. 35. A company records a charge to warranty expense in the year it makes the sale. This is in accordance with: a. The cost principle. b. The matching principle. c. The disclosure principle. d. All of the above.

Answer 1

= Account Revirable less! written off $100000 ($500) net Realizable Account $99500 Receivable in besar a c) 99500 bin bub kon bello a 2) 1-5. of credit sales - 1/(800000) = $8000 Bad debts = $8000 3) 10-1 (Account Receivables) 107. (100000) = $10000

Warranty expenses are recognized in the same period in which sales are made, if it is 2 probable that an expense will be incurred and estimate of y amount can be made This is called matching principle than 3 B) The matching principle Nasvi koji