e Allowance or Bad Debts account has a credit balance of S8,000 before the adjus
ID: 2565840 • Letter: E
Question
e Allowance or Bad Debts account has a credit balance of S8,000 before the adjusting entry for bad debts e pense A eraa ing the ac i eivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $14,500. hat willbe balance of the Allowance for Bad Debts reported on the balance sheet? Chapter 8 Qu A. $6,500 B. $22,500 C$13,050 $14,500 ean Art is a new business. During its first year of operations, credit sales were $40,000 and collections of credit sales were $4.00acouict 57 itten off. Management uses the ag alance of the Allowance for Bad Debts is u method to account for bad debts expense and estimated $600 as uncollectible at year end. The ending A. $100 B. $1,300 D. $600 April 1, 2017, Banne Services received a 9-month note for $13,000 at 11%. to two decimal places, and your final answer to the nearest dolar.) Calculate the amount of interest due at maturity Rand any nemedateExplanation / Answer
7. The Begining balance of Allowance for Bad debt account is $8,000
Basing upon againg of accounts receivable the uncollectable account is $14,500
So current year a further bad debt expense of $6,500(14,500 -$8,000) need to be created by posing following entry
Dr. Bad Debt Expense $ 6,000
Cr. Allowance for Bad Debt $6,500
So after posting this adjusting entry the year end Allowance for bad debt account is $14,500 and this will reported on the balance sheet.
Answer D. $14,500
8. Out of total accounts receivable of $6,000($40,000 -$34,000) ,$700 written off . So balance accounts receivable is $ $5,300. Out of this $5,300 managment estimate $600 is uncollectable , so the adjusting entry will be
Dr. Bad Debt Expense $ 600
Cr. Allowance for Bad Debt $600
So the ending balalnec of Allowance for Bad Debt is $600
9.Interest Due at maturiy = $13,000 X 11% X 9/12 = $1072.50 or $1,073(rounded off)
Answer : C $1,073
10.Accrued interest on the Note: $8,000 X 10% X 3/12 = $200
Answer : D $200
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