38. Type of accounting aimed at extremal users which focuses on preparation of financial statements. A. Financial Accounting B. Periodic Accounting C. Managerial Accounting D. Accrual Basis Accounting 39. Company A estimates that bad debt is 5% of total sales. Total sales for the period are $50,000. The balance of Allowance for Doubtful Accounts is $250 (credit balance). How much will the company book for bad debt expense? A. $2,500 B. $5,000 C. $2,250 D. $0

40. Company C prepared an accounts receivable aging schedule. The total estimated bad debt from the aging schedule is $5,000. The balance of Allowance for Doubtful Accounts is $2,000 (credit balance). How much will the company book for bad debt expense? A. $5,000 B. $ 750 C. $2,500 D. $3,000

41. Fritz & Sons sells a piece of equipment for $15,000 cash. The asset originally cost $80,000 and has accumulated depreciation of $70,000. What is the gain or loss on the sale? A. $5,000 gain B. $5,000 loss C. $55,000 gain D. $55,000 loss

Below are the details for a plant asset that ZIP Company just purchased. Use the data to answer questions 42.-44. Asset Cost $62,500 Appraisal Value $85,000 Useful Life 20 years or 400,000 units Salvage Value $2,500 Units Produced in Year 1 30,000 Units Produced in Year 2 500

42. Using Units of Activity Method of depreciation, what is the depreciation expense recorded for Year 1 and Year 2? A. Year 1 = $60,000 Year 2 = $0 B. Year 1 = $4,500 Year 2 = $75 C. Year 1 = $7,500 Year 2 = $125 D. Year 1 = $2,083 Year 2 = $1,250

43. Using Straight-Line Method of depreciation, what is the depreciation expense recorded for Year1 &Year 2? A. Year 1 = $3,125 Year 2 = $3,000 B. Year 1 = $4,250 Year 2 = $4,125 C. Year 1 = $3,000 Year 2 = $3,000 D. Year 1 = $4,125 Year 2 = $4,125

44. Using Double-declining Balance Method of depreciation, what is the depreciation expense recorded for Year 1 & Year 2? A. Year 1 = $8,500 Year 2 = $7,650 B. Year 1 = $3,125 Year 2 = $2,969 C. Year 1 = $6,000 Year 2 = $5,400 D. Year 1 = $6,250 Year 2 = $5,625