Multiple Choice (3 points each – 48 points total – please include answers on answer
Before year-end adjusting entries, Bass Company's account balances at
December 31, 2004, for accounts receivable and the related allowance for
uncollectible accounts were $700,000 and $45,000, respectively.
An aging of
accounts receivable indicated that $62,500 of the December 31 receivables are
expected to be uncollectible.
The net realizable value of accounts receivable
after adjustment is
After the adjusting entry the balance of accounts receivable is still $700,000
while the balance in the allowance is $62,500.
During the year, Jantz Company made an entry to write off a $4,000 uncollectible
Before this entry was made, the balance in accounts receivable was
$80,000 and the balance in the allowance account was $4,500. The net
realizable value of accounts receivable after the write-off entry was
After the writeoff the balance in accounts receivable is $76,000 and the balance
in the allowance is 500.
The following accounts were abstracted from Vann Co.'s unadjusted trial balance
at December 31, 2004:
Allowance for uncollectible accounts
Net credit sales
Vann estimates that 2% of the gross accounts receivable will become
uncollectible. After adjustment at December 31, 2004, the allowance for
uncollectible accounts should have a credit balance of