21. Following are the account balances from the December 31 trial balance of Hark Company: Accounts Receivable Allowance for Bad Debts Sales Revenue Sales Returns and Allowances $ 20,000 800 (dr) 135,000 5,000 If 10 percent of the Accounts Receivable is estimated to be uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for A) $2,000 B) $2,080 C) $2,800 D) $1,200 22. The difference between gross sales and net sales is A) Selling and administrative expenses B) Sales discounts and sales returns and allowances C) Gross margin D) Cost of goods sold 23. Penn Inc. reported an allowance for bad debts of $30,000 (debit) at December 31, 2006, before performing an aging of accounts receivable. As a result of the aging, Penn Inc. determined that an estimated $52,000 of the December 31, 2006, accounts receivable would prove uncollectible. The adjusting entry required at December 31, 2006, would be A) Allowance for Bad Debts 52,000 Accounts Receivable 52,000 B) Bad Debt Expense 52,000 Allowance for Bad Debts 52,000 C) Allowance for Bad Debts 82,000 Bad Debt Expense 82,000 D) Bad Debt Expense 82,000 Allowance for Bad Debts 82,000 24. Bleeker Company had the following account balances Sales Revenue, $50,000; Sales Returns and Allowances, $1,200; Sales Discounts, $1,200; and Bad Debts, $200. Given these balances, the amount of net sales is A) $47,800 B) $47,600 C) $49,000 D) $50,000 25. When a specific customer's account is written off by a company using the allowance method, the effect on net income and the net realizable value of the accounts receivable is Net Realizable Value of Accounts Receivable Net Income A) Increase B) Decrease C) Decrease D) None Increase None Decrease None