Quiz - Chapter 7 with Solutions

Quiz Chapter 7 - Total Allowance Accounts Receivable current> 90 days Needed $210,000 $200,000 $10,000 uncollectible estimate 5.0 50.0 $10,000.0

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Unformatted text preview: Total Allowance Accounts Receivable current > 90 days Needed $210,000 $200,000 $10,000 % uncollectible estimate 5.0% 50.0% $10,000.0 $5,000.0 $15,000 Quiz – Chapter 7 1. Use the following information to answer questions 1 - 3. On December 1st, Viking Inc.’s accounts receivable has a balance of $200,000. The net realizable value was $195,000. Viking uses the aging method to estimate bad debt. At the end of December, Vikings aged their receivables and the results showed that the age of the $210,000 accounts receivable balance was: $200,000 under 30 days and Viking expects that 5% will be uncollectible. The remaining $10,000 is now over 90 days old and Viking only expects to recover 50% of those receivables. How much will Viking write-off during the month of December? a. $10,000 b. $5,000 c. $0 d. $15,000 Nothing written off. Everything above still has to do with estimates. You don’t write-off until you’re sure it is a bad debt. 2. Using the information provided in Question 1, what will the bad debt expense be in December using the aging method?...
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This note was uploaded on 12/17/2010 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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Quiz Chapter 7 - Total Allowance Accounts Receivable current> 90 days Needed $210,000 $200,000 $10,000 uncollectible estimate 5.0 50.0 $10,000.0

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