____ 4. The following information is from the records of Prosser, Inc. for the year ended December 31, 2016.

Allowance for Doubtful Accounts, January 1, 2016 ..	$ 6,000	(cr)
Credit Sales, 2016 ...............................	2,920,000
Sales Returns and Allowances, 2016 ................	32,000

If the basis for estimating bad debts is 1 percent of net sales, the correct amount of doubtful accounts expense for 2016 is

a.	$22,800.
b.	$23,200.
c.	$28,880.
d.	$34,880 4b Assume Joe Smith a customer with an account balance of $1,000 is bankrupt. The controller asks you to write off his account, the journal entry is:

____ 5. Gekko, Inc. reported the following balances (after adjustment) at the end of 2016 and 2015.

	12/31/2016	12/31/2015
Total accounts receivable .................	$105,000	$96,000
Net accounts receivable ...................	102,000	94,500

During 2016, Gekko wrote off customer accounts totaling $3,200 and collected $800 on accounts written off in previous years. Gekko's doubtful accounts expense for the year ending December 31, 2016 is

a.	$1,500.
b.	$2,400.
c.	$3,000.
d.	$3,900.

____ 7. Gray Company had an accounts receivable balance of $50,000 on December 31, 2015, and $75,000 on December 31, 2016. The company wrote off $20,000 of accounts receivable during 2016, and collected $3,000 on an account written off in 2014. Sales for the year 2016 totaled $620,000. All sales were on account. The amount collected from customers on accounts receivable during 2016 was

a.	$575,000.
b.	$578,000.
c.	$600,000.
d.	$595,000.

____ 11. Franchise fees are properly recognized as revenue

a.	when received in cash.
b.	when a contractual agreement has been signed.
c.	after the franchise business has begun operations.
d.	after the franchiser has substantially performed its service.