Carson Company on July 15 sells merchandise on account to Tayler Co. for $1000 t

Question

Carson Company on July 15 sells merchandise on account to Tayler Co. for $1000 terms 2/10, n/30. On july Tayler Co. Returns merchandise worth $400 to Carson company. On july 24 payment received form tayler Co for the balance due. What amount of cash received ?
A. 600
B.1000
C.580
D.588

Under the allowance method, Bad debt expense is recorded
A. for an amount that the company estimates it will not collect
B.when the loss amount is known.
C.several times during the accoungting peroid.
D.When an individual account is written off.


Smithson Corporation unadjusted trial blanace includes the following balances (asume normal balance)
Accounts Receivable $1119000
Allowances for Doubtful Accounts $21300
Bad debts are estimated to be 6% of oustanding recievable. what amouint of bad expense will the company record?

A.68418
B.67140
C.45840
D.44562

The interest on $2000 6% 90-day note recivable is
A.90
B.30
C.60
D.120

Explanation / Answer

1. 588 (1000-400)=600x0.98=588 Company took 2% discount 2. A - company estimates the uncollectible amount and expense it 3. C. 45840 -1119000x0.06=67140 Because the allowance already has a 21300 in it, you need to sutract it so 67140-21300=45840 4. B $30 - 2000x0.06x90/360 ( interest is always statted for the whole year)

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