Question 31 1. Robert Company retired a $500,000, 7% bond issue at 98. If the un

Question

Question 31
1.
Robert Company retired a $500,000, 7% bond issue at 98. If the unamortized discount is $4,000, the entry will include a:
Answer

A. Debit to loss on bond retirement for $4,000

B. Credit to gain on bond retirement for $4,000

C. Credit to gain on bond retirement for $6,000

D. Debit to loss on bond retirement for $6,000
1 points
Question 32
1.
Which of the following corporate bond ratings are listed in an increasing level of risk?
Answer

A. AAA, A, BB, C

B. C, BB, A, AAA

C. BB, C, A, AAA

D. A, AAA, BB, C
1 points
Question 33
1.
Buck Company's Accounts Receivable account has a balance of $400,000 at the end of the year, and the company estimates the Net Realizable Value of Accounts Receivable to be $384,000. The Allowance for Doubtful Accounts has a credit balance of $9,000 at the beginning of the current year, and during the year, the company wrote off $7,500 of accounts receivable. The year-end adjusting entry would require a:
Answer

A. A debit to Bad Debts Expense for $14,500

B. A credit to Allowance for Doubtful Accounts for $17,500

C. A credit to Allowance for Doubtful Accounts for $16,000

D. A debit to Bad Debts Expense for $7,000
1 points
Question 34
1.
At the beginning of 2011, Loeb Company's allowance for doubtful accounts is $12,000. During the year 2011, $4,250 was written off as uncollectible. On December 31, 2011, Loeb Company used an aging schedule of accounts receivable and determined that $10,530 of the accounts receivable would probably be uncollectible. What would be the bad debts expense that should be reported on Loeb Company's 2011 income statement?
Answer

A. $ 5,720

B. $26,780

C. $18,280

D. $ 2,780
1 points
Question 35
1.
Trenton Company's Accounts Receivable balance at December 31 was $90,000, and there was a debit balance of $600 in the Allowance for Uncollectible Accounts. The firm estimates that 3% of the Accounts Receivable will prove to be uncollectible. After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year-end?
Answer

A. $87,900

B. $86,700

C. $87,300

D. $90,000

E. None of the above
1 points
Question 36
1.
Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $40,000; Allowance for Uncollectible Accounts, $800 (debit balance); Sales revenue, $450,000. If the company ages the accounts and determines that $1,700 of the receivables may be uncollectible, the adjusting entry should be:
Answer

A. Bad Debts Expense 1,700
Allowance for Uncollectible Accounts 1,700


B. Bad Debts Expense 2,500
Allowance for Uncollectible Accounts 2,500


C. Bad Debts Expense 900
Allowance for Uncollectible Accounts 900


D. Bad Debts Expense 1,700
Accounts Receivable 1,700


E. None of the above
1 points
Question 37
1.
The entry to record the write-off of Chang, Inc.'s account using the allowance method is:
Answer

A. Bad Debts Expense
Allowance for Doubtful Accounts


B. Bad Debts Expense
Accounts Receivable--Chang, Inc.


C. Allowance for Doubtful Accounts
Accounts Receivable--Chang, Inc.


D. Accounts Receivable-- Chang, Inc.
Allowance for Doubtful Accounts


E. None of the above
1 points
Question 38
1.
A firm that uses the direct write-off method of recording credit losses wrote off the $400 account of D. James in October, 2011. In February, 2012, the firm received a final $100 payment from James' trustee in bankruptcy. The firm should make the following entry or entries to record the payment:
Answer

A. Cash 100
Allowance for Uncollectible Accounts 100


B. Allowance for Uncollectible Accounts 100
Bad Debts Expense 100


C. Accounts Receivable--James 100
Allowance for Uncollectible Accounts 100


D. Accounts Receivable--James 100
Bad Debts Expense 100

Cash 100
Accounts Receivable--James 100


E. None of the above
1 points
Question 39
1.
The minimum amount of contributed capital that must remain in the corporation as a margin of protection for creditors is called the:
Answer

A. Paid-in capital

B. Legal capital

C. Retained earnings

D. Treasury stock

E. None of the above
1 points
Question 40
1.
Treasury stock is:
Answer

A. Stock of other corporations owned by a corporation

B. A U.S. government security

C. A corporation's own stock that has been retired

D. A corporation's own stock that has been reacquired and held for future use

E. None of the above

Explanation / Answer

31. C. Credit to gain on bond retirement for $6,000 32. A. AAA, A, BB, C 33. A. A debit to Bad Debts Expense for $14,500 34. D. $2,780 35. C. $87,300 36. B. Bad Debts Expense 2,500 Allowance for Uncollectible Accounts 2,500 37. C. Allowance for Doubtful Accounts Accounts Receivable--Chang, Inc. 38. D. Accounts Receivable--James 100 Bad Debts Expense 100 Cash 100 Accounts Receivable--James 100 39. B. Legal capital 40. D. A corporation's own stock that has been reacquired and held for future use

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