1)

For 2021, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance for uncollectible accounts of $89,500 and $2,700, respectively, at December 31, 2020. During 2021, Rahal's credit sales and collections were $410,000 and $414,000, respectively, and $2,940 in accounts receivable were written off. Rahal's accounts receivable at December 31, 2021, are:

Multiple Choice

• $93,500.

• $90,560.

• $85,500.

• $82,560.

2)

As of January 1, 2021, Farley Co. had a credit balance of $520,000 in its allowance for uncollectible accounts. Based on experience, 3% of Farley's credit sales have been uncollectible. During 2021, Farley wrote off $645,000 of accounts receivable. Credit sales for 2021 were $18,900,000. In its December 31, 2021, balance sheet, what amount should Farley report as allowance for uncollectible accounts?

Multiple Choice

• $1,087,000.

• $692,000.

• $567,000.

• $442,000.