2&3) The following summary was prepared at 12/31/20: Age of Account Amount Probability of Default 0 - 30 days $75,000 2% 31 -60 days 25,000 10% 61 - 90 days 10,000 25% Over 90 days 6,000 80% The following additional information is available: Net sales in 2020 $1,200,000 Allowance for doubtful accounts, 1/1/20 $10,000 credit Accounts written off during 2020 $8,000 Recoveries of write-offs in 2020 $1,000 2. If aging of A/R is used as the basis for estimating bad debt, what will be reported as bad debt expense in 2020? a) $11,300 b) $12,000 c) $8,300 d) $15,000 3. If 1% of 2020 sales is used as the basis for estimating bad debt, what will be the balance in A/D/A as of 12/31/20? a) $15,000 b) $12,000 c) $8,300 d) $11,300 4. PAN Corp had the following investments at 12/31/20: Plan to Hold Cost Investment in JCorp Stock 3 years $18,000 Investment in Y Inc Bonds 9 months 10,000 Investment in Z Corp Bonds 2 years 5,000 FMV $23,000 9,000 7,500 If 2020 net income (including unrealized gains & losses) was $150,000, how much was total comprehensive income? a) $150,000 b) $156,000 c) $151,500 d) $152,500 5. On 3/1/21, Buyer Company purchased merchandise for $40,000, terms: 2/10, N/30. Buyer uses the net method and paid on 3/30/21. Which of the following would be recorded by Buyer on either 3/1 or 3/302 a) debit purchases $40,000 b) debit discounts lost $800 c) debit A/P $40,000 d) credit purchase discounts $800 LAC