Question

. for $250 De A Sales c e for Review A khalsal 200 SOB.000 At Desember 31, 2000, before using the 1.000.000 debitandance for dow n orie nt a te will prove to be collectible. What is the set cted of the receivables reported on the financia m ento December 31. 2000 amount expected to be collected of the rece de Becky A) 512.000 TI) S972.000 C) SR.000 D) 70.000 18. Wellington Corp. has outstanding accounts receivable totaling so counts receivable sotaling 56.5 million as of December 31 and sales on credit uring the year of There is also a credit balance of $12.000 in the allowance for doubtful accounts debe expense recognized for the year? estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of a A) 5402.000 B) $390,000 C) $1,440,000 D) $378,000 19. Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account A) B) C) D) increases the allowance for uncollectible accounts. has no effect on the allowance for uncollectible accounts. has no effect on net income. decreases net income. 20. What is the normal journal entry when writing-off an account as uncollectible under the allowance method? A) Debit Allowance for Doubtful Accounts, credit Accounts Receivable. B) Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. C) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. D) Debit Accounts Receivable, credit Allowance for Doubtful Accounts. Page 4

Answer 1

16. (C) Debit Accounts Receivable for $25,000

In gross method sales are recorded at full value without any deduction of discount .

Journal Entry :

Accounts Receivable Debit $25.000

To Sales Revenue Credit $25,000

19. (C) has no effect on net income

Under the allowance method, if uncollectible accounts receivable are written off by removing the amount from Accounts Receivable. The entry to write off a bad account affects only balance sheet accounts: a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. No expense or loss is reported on the income statement .

20. (A) Debit Allowance for Doubtful Accounts, credit Accounts Receivable.

As per HOMEWORKLIB POLICY only first mentioned question is required to be solved when it is not mentioned as to which part of question needs to be done. Although i tried doing the remaining parts also but the image is not very much clear so could not understand the figures in question 17 and 18.