1. Mran Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $500,000 and credit sales are $3,000,000. Management estimates that 2% of accounts receivable will be uncollectible. What adjusting entry will Mran Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $2,000 credit balance before adjustment?

a. Bad Debt Expense ......................................................... 10,000

Allowance for Doubtful Accounts .......................... 10000

b. Bad Debt Expense ......................................................... 10,000

Accounts Receivable ............................................. 10,000

c. Bad Debt Expense ......................................................... 8,000

Accounts Receivable ............................................. 8,000

d. Bad Debt Expense ......................................................... 8,000

Allowance For Doubtful Accounts ......................... 8,000

2. During 2020, Jack's Inc. had sales on account of $150,000, cash sales of $75,000, and collections on account of $130,000. In addition, they collected $2,750 which had been written off as uncollectible in 2019. As a result of these transactions, the change in the accounts receivable balance indicates a

a. $17,250 increase.

b. $20,000 increase.

c. $75,000 increase.

d. $150,000 increase.

3. When an account is written off using the allowance method, accounts receivable

a. is unchanged and the allowance account increases.

b. increases and the allowance account increases.

c. decreases and the allowance account decreases.

d. decreases and the allowance account increases.

4. The maturity value of a $75,000, 8%, 90-day note receivable dated November 1 is

a. $75,000.

b. $76,500.

c. $78,500.

d. $81,000.

Important note:

PLEASE SHOW WORK FOR ALL QUESTIONS!