1) Plasma Inc. uses the percentage of credit sales method to estimate Bad Debt Expense. The company reported net credit sales of $610,000 during the year. Plasma has experienced bad debt losses of 3% of credit sales in prior periods. At the beginning of the year, Plasma has a credit balance in its Allowance for Doubtful Accounts of $5,100. No write-offs or recoveries were recorded during the year. What amount of Bad Debt Expense should Plasma recognize for the year?

a) $13,200.

B) $18,300.

C) $5,100.

D) $23,400.

2) A company paid $515,000 to purchase equipment and $16,500 to have the equipment delivered to and installed in the company's production facilities. The equipment is expected to be used a total of 29,500 hours throughout its estimated useful life of seven years. The estimated residual value of the equipment is $6,500. The company began using the equipment on May 1, 2016. The company has an October 31, 2016 year-end. It used the equipment for a total of 12,700 hours between May 1 and October 31, 2016. Using the units-of- production method, what amount of depreciation expense would the company report in the income statement prepared for the year-ended October 31, 2016?

a) $220,017

b) $525,000

c) $113,008

d) $226,017