Question

Use the following to answer questions 20-22 Chapter 5 Page 5-2 At the beginning of the year; MB, Inc.'s allowance for uncollectible accounts had a beginning balance of $5,000. On January 22nd, MB wrote off the A/R from customer C for $400 20. Record the entry for write-off 21. $ By the end of the year (December 31"); total accounts written off were $4,910 (including the write off for customer C). What is the balance in the allowance for uncollectible accounts after all the write-offs? 22. $_ How much did bad debt expense change when the company wrote off the accounts receivables? Use the following to answer questions 23-25 The company invested $100,000 on July 1, 20XA at 4% simple interest for 27 months). 23. $ Determine interest revenue for 20XA _Determine interest revenue for 20XB Determine interest revenue for 20XC

Answer 1

Answer to Question 20: Credit General Journal Allowance for Uncollectible Accounts Accounts Receivable Debit 400 400 Answer to Question 21: Ending Allowance for Uncollectible Accounts = Beginning Allowance for Uncollectible Accounts - Account Write-Off Ending Allowance for Uncollectible Accounts = $5,000 - $4,910 Ending Allowance for Uncollectible Accounts = $90 Answer to Question 22: Accounts receivable written off does not affect the bad debt expense. Change in bad debt expense is $0. Answer to Question 23- 25: Amount Invested = $100,000 Simple Interest Rate = 4% Interest Revenue for 20XA = Amount Invested * Simple Interest Rate * Period Interest Revenue for 20XA = $100,000 * 4% * 6/12 Interest Revenue for 20XA = $2,000 Interest Revenue for 20XB = Amount Invested * Simple Interest Rate * Period Interest Revenue for 20XB = $100,000 * 4%* 12/12 Interest Revenue for 20XB = $4,000 Interest Revenue for 20XC = Amount Invested * Simple Interest Rate * Period Interest Revenue for 20XC = $100,000 * 4% * 9/12 Interest Revenue for 20XC = $3,000