6. For the month of December, the records of Scrooge Corporation show the following information: Cash received on accounts receivable Cash sales Accounts receivable, December 1 Accounts receivable, December 31 Accounts receivable written off as $45,000 30,000 80,000 75,000 2,000 The corporation uses the direct write-off method in accounting for uncollectible accounts receivable. What are the gross sales for the month of December? A) $60,000 B) $61,000 C) $72,000 D) $59,000 7. An analysis and aging of the accounts receivable of Kaiten Company at December 31 revealed the following data: Accounts receivable Allowance for bad debts (before adjustment) Accounts estimated to be uncollectible $475,000 25,000 (cr.) 32,000 The net realizable value of the accounts receivable at December 31 should be A) $475,000 B) $500,000 C) $450,000 D) $443,000 8. The direct write-off method of accounting for bad debts A) Causes accounts receivable to appear on the balance sheet at their estimated net realizable value B) Is subject to a significant amount of estimation error C) Often fails to match bad debt losses with sales for the same period D) Requires that losses from bad debts be recorded in the period in which sales are made 9. Samson Corporation had sales of $1,000,000 during 2006, of which 80 percent were on credit. On December 31, 2006, Accounts Receivable totaled $80,000 and Allowance for Bad Debts had a credit balance of $1,200. Given the preceding information, if uncollectible receivables are estimated to be 1/2 of 1 percent of credit sales, the adjusting entry to account for uncollectible receivables as of December 31, 2006, would include a A) Debit to Bad Debt Expense of $4,000 B) Credit to Bad Debt Expense of $2,800 C) Debit to Bad Debt Expense of $5,000 D) Credit to Allowance for Bad Debts of $5,000 10. Wiley Company's monthly bank statement showed an ending balance of $18,464. The bank reconciliation included a deposit in transit, $1,637; outstanding checks, $2,170; an "NSF" check, $788; a bank service charge, $25; and proceeds of a customer's note collected by the bank, $2,300. The correct cash balance at the end of the month is A) $20,101 B) $17,931 C) $18,744 D) $20,231