53 Given the following account balances for the Blackwell Corp. at 12/31/12 Debit $1,000,000 10,000 Credit Accounts Receivable Allowance for Doubtful Accounts et Credit Sa $4,000,000 Blackwell estimates that 4% of the gross accounts receivable will become uncollectible. After adjustments on December 31, 2012, the Allowance for Doubtful Accounts should have a credit balance of A)$150,000 B)$160,000 C) $50,000 D) $40,000 E) $30,000 ZK 54 The following accounts exist on December 31, 2013 prior to adjustments: Debit $900,000 Credit Accounts Receivable Allowance for Doubtful Accounts 20,000 $4,000,000 Net Credit Sales It's estimated that 5% of the gross Accounts Receivable will not be collected. The adjusting journal entry to the Allowance account will be: A) $20,000 B) $25,000 C) $45,000 D) $65,000 Use the following information to answer the next three questions Given the following 12/31/12 account balances for the Carolina Company, prior to any year-end adjustments Net Sales Accounts Receivable Allowance for Bad Debts $11,000 credit $ 5,000 debit $ 80 credit An aging of receivables estimates $360 of accounts receivable are uncollectible. 55.Assuming Carolina uses the Aging Method, the 12/31/12 adjusting entry to Bad Debt Expense will be: A) $280 B) $520 C) $200 D) $360 E) $440 56.Assuming Carolina uses the Aging Method, the Allowance for Bad Debts on the 12/31/12 balance sheet will be: A) $280 B) $520 C)$200 D)$360 E) $440 Q: What is allowance for bad debts? What's the difference from bad debt expense and allowance for doubt allowance for doubtful? 46. An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a A) B) C) D) Debit to Bad Debts Expense for $4,000 Debit to Allowance for Doubtful Accounts for $2,900 Debit to Bad Debts Expense for $2,900 Credit to Allowance for Doubtful Accounts for $4,000 to Q: why Allowance for Doubtful Accounts has a $1,100 credit balance Is not the ending balance is 1,100? K 45. Without recovery of accounts previously written off, a debit balance in the Allowance for Doubtful Accounts A) Is the normal balance for that account. B) Indicates that actual bad debt write-offs have exceeded previous provisions (allowances) C) Indicates that actual bad debt write-offs have been less than what was estimated. D) Cannot occur if the percentage of receivables method of estimating bad debts is used. for bad debts. Why? What's meaning? 43. Under the allowance method of recognizing uncollectible accounts, the write-off of arn uncollectible account: A)Increases the allowance B) Increases net income C) Has no effect on Bad Debt Expense D) Decreases bad debt expense E) Decreases the Accounts Receivable NRV Why the answer is C? Why E Is not correct? When a company unexpectedly recovers bad debts written off as uncollectible in prior years, what will be the effect on 44. debt expern nder each of the following methods? A) B) C) D) Allowance None None Increase None Direct Write-Off Increase None Increase Decrease Cr Cr AR