1. Orion Rentals is unable to collect on a note worth $25,000 and has accumulated interest of $250. It convert this note and interest to accounts receivable. After some time, Orion is still unable to collect the debt and it decides to sell the converted note to a collection agency. The collection agency will pay only 20% of the value of accounts receivable to Orion. What is the amount of cash paid to Orion from the collection agency?

A. $5,050

B. $5,000

C. $20,000

D. $19,950

2. Which of the following is nota way to manage earnings?

A. Change the dates of common stock issuance.

B. Change the method for bad debt estimation.

C. Change the figure for the uncollectible percentage.

D. Under the balance sheet aging method, change the past-due categories.

3. Which of the following is true of a maturity date?

A. It is the date when principal and interest on a note are to be repaid to the lender.

B. It must be calculated in days, not in months or years.

C. It is the date of establishment of note terms between a lender and customer.

D. It is not a characteristic of a note receivable.

4. Which method delays recognition of bad debt until the specific customer accounts receivable is identified?

A. direct write-off method

B. income statement method

C. balance sheet method

D. allowance method

5. Balloons Plus computes bad debt based on the allowance method. They determine their current years balance estimation to be a credit of $84,000. The previous period had a credit balance in Allowance for Doubtful Accounts of $26,000. What should be the reported figure in the adjusting entry for the current period?

A. $58,000

B.$84,000

C. $26,000

D. $110,000