116.Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 0.5% of sales, what is the amount of the bad debts expense adjusting entry?
A. $4,625
B. $3,960
C. $5,290
D. $4,750
E. $4,825
$925,000 * 0.005 = $4,625
117.On July 9, Mifflin Company receives a $8,500, 90-day, 8% note from customer Payton Summers as payment on account. Compute the maturity date for the note.
A. October 8
B. October 7
C. November 8
D. November 7
E. November 6
July 31 - 9 = 22; August = 31; September = 30; 90 - 22 - 31 - 30 = October 7
118.On July 9, Mifflin Company receives a $8,500, 90-day, 8% note from customer Payton Summers as payment on account. Compute the amount due at maturity for the note.
A. $8,628
B. $8,192
C. $8,613
D. $8,500
E. $8,670
$8,500 * 0.08 * 90/360 = $170 + $8,500 = $8,670
119.On July 9, Mifflin Company receives a $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on July 9 to record receipt of the note?
A. Debit Accounts Receivable $8,500; credit Sales $8,500.
B. Debit Notes Receivable $8,670; credit Sales $8,670.
C. Debit Notes Receivable $8,500; credit Accounts Receivable $8,500.
D. Debit Notes Receivable $8,500; credit Sales $8,500.
E. Debit Notes Receivable $8,725; credit Interest Revenue $225; credit Accounts Receivable $8,500.
120.On July 9, Mifflin Company receives a $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on the maturity date assuming the maker pays in full?
A. Debit Notes Receivable $8,500; debit Interest Receivable $170; credit Sales $8,670.
B. Debit Cash $8,670; credit Interest Revenue $170; credit Notes Receivable $8,500.
C. Debit Cash $8,628; credit Interest Revenue $128; credit Notes Receivable $8,500.
D. Debit Cash $8,613; credit Interest Revenue $113; credit Notes Receivable $8,500.
E. Debit Cash $8 500; credit Notes Receivable $8,500.
$8,500 * 0.08 * 90/360 = $170 + $8,500 = $8,670
121.On November 19, Nicholson Company receives a $15,000, 60-day, 8% note from a customer as payment on account. What adjusting entry should be made on the December 31 year-end?
A. Debit Interest Receivable $1,200; credit Interest Revenue $1,200.
B. Debit Interest Receivable $140; credit Interest Revenue $140.
C. Debit Interest Receivable $200; credit Interest Revenue $200.
D. Debit Interest Revenue $140; credit Interest Receivable $140.
E. Debit Interest Revenue $200; credit Interest Receivable $200.
$15,000 * 0.08 * 42/360 = $140
122.On November 1, Orpheum Company accepted a $10,000, 90-day, 8% note from a customer settle an account. What entry should be made on the November 1 to record the note acceptance?
A. Debit Note Receivable $10,000; credit Cash $10,000.
B. Debit Note Receivable $10,000; credit Accounts Receivable $10,000.
C. Debit Note Receivable $10,000; credit Sales $10,000.
D. Debit Cash $10,000; credit Sales $10,000.
E. Debit Sales $10,000; credit Accounts Receivable $10,000.
123.The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts:
Accounts receivable$435,000Debit
Allowance for Doubtful Accounts1,250Debit
Net Sales2,100,000Credit
All sales are made on credit. Based on past experience, the company estimates 3.5% of ending account receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A. Debit Bad Debts Expense $13,975; credit Allowance for Doubtful Accounts $13,975.
B. Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.
C. Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475.
D. Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.
E. Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350.
$435,000 * 0.035 = $15,225 + $1,250 = $16,475
124.The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.
Accounts receivable$435,000Debit
Allowance for Doubtful Accounts1,250Debit
Net Sales2,100,000Credit
All sales are made on credit. Based on past experience, the company estimates 1% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A. Debit Bad Debts Expense $19,750; credit Allowance for Doubtful Accounts $19,750.
B. Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.
C. Debit Bad Debts Expense $22,250; credit Allowance for Doubtful Accounts $22,250.
D. Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.
E. Debit Bad Debts Expense $21,000; credit Allowance for Doubtful Accounts $21,000.
$2,100,000 * 0.01 = $21,000
125.On February 1, a customer's account balance of $2,300 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?
A. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300.
B. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300.
C. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300.
D. Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300.
E. Debit Accounts Receivable $250; credit Allowance for Doubtful Accounts $2,300.