# An Aging Of A Company’s Accounts

An Aging Of A Company’s Accounts

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Question 1

An aging of a company’s accounts receivable indicates that \$14,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a \$1,100 credit balance, the adjustment to record bad debts for the period will require a

 [removed] credit to Allowance for Doubtful Accounts for \$14,000.

 [removed] 12

 [removed] 14

 [removed] debit to Bad Debt Expense for \$12,900.

Question 2

A company has net credit sales of \$750,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If Allowance for Doubtful Accounts has a credit balance of \$2,000 prior to adjustment, its balance after adjustment will be a credit of

 [removed] \$15,040.

 [removed] \$13,000.

 [removed] \$15,000.

 [removed] \$17,000.

Question 3

The maturity value of a \$50,000, 9%, 60-day note receivable dated July 3 is

 [removed] \$59,000.

 [removed] \$50,750.

 [removed] \$50,000.

 [removed] 54,500.

uestion 4

Reck Company receives a \$15,000, 3-month, 8% promissory note from Fey Company in settlement of an open accounts receivable. What entry will Reck Company make upon receiving the note?

[removed]
 Notes Receivable 15,000 Interest Receivable 300 Accounts Receivable—Fey Company 15,000 Interest Revenue 300

[removed]
 Notes Receivable 15,000 Accounts Receivable—Fey Company 15,000

[removed]
 Notes Receivable 15,300 Accounts Receivable—Fey Company 15,000 Interest Revenue 300

[removed]
 Notes Receivable 15,300 Accounts Receivable—Fey Company 15,300

Question 5

Gagner Clinic purchases land for \$175,000 cash. The clinic assumes \$1,500 in property taxes due on the land. The title and attorney fees totaled \$1,000. The clinic has the land graded for \$2,200. What amount does Gagner Clinic record as the cost for the land?

 [removed] \$157,200

 [removed] \$175,000

 [removed] \$179,700

 [removed] \$157,500

Question 6

Carey Company buys land for \$50,000 on 12/31/13. As of 3/31/14, the land has appreciated in value to \$50,700. On 12/31/14, the land has an appraised value of \$51,800. By what amount should the Land account be increased in 2014?

 [removed] \$1,100

 [removed] \$0

 [removed] \$1,800

 [removed] \$700

Question 7

Engler Company purchases a new delivery truck for \$55,000. The sales taxes are \$4,000. The logo of the company is painted on the side of the truck for \$1,600. The truck license is \$160. The truck undergoes safety testing for \$290. What does Engler record as the cost of the new truck?

 [removed] \$60,890

 [removed] \$61,050

 [removed] \$59,000

 [removed] \$60,600

Question 8

A company purchased factory equipment on April 1, 2014 for \$160,000. It is estimated that the equipment will have a \$20,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014 is

 [removed] \$12,000.

 [removed] \$16,000.

 [removed] \$14,000.

 [removed] \$10,500.

Question 9

A factory machine was purchased for \$375,000 on January 1, 2014. It was estimated that it would have a \$75,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2014. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2014 would be

 [removed] \$60,000.

 [removed] \$37,500.

 [removed] \$30,000.

 [removed] \$75,000.

Question 10

Farr Company purchased a new van for floral deliveries on January 1, 2014. The van cost \$56,000 with an estimated life of 5 years and \$14,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 2015?

 [removed] \$35,840

 [removed] \$13,440

 [removed] \$26,880

 [removed] \$8,960