8. On January 1, 2014, BITCO began the year with a credit balance of $20,000 in the allowance for doubtful accounts. During the year, BITCO wrote-off $18,750 worth of accounts receivable. BITCO estimates that 10% of the total accounts receivable balance will be uncollectable. The accounts receivable account shows a balance of $250,000 on December 31, 2014. What is the amount of bad debt expense to be recognized during 2014? a $23,750 b. $25,000 c. $43,750 $26,250 $18,750 10. Carlos purchased $4,000 of goods on credit from R.A. Mona. When payment was due, Mona received notice from Carlos that he would not be able to pay. Mona agreed to accept payment in 6 months along with 5% simple interest. A note receivable was drafted with these terms. Which of the following are possible parts of the journal entry that Mona would make at the time the note is due, assuming that Carlos does not default a. Credit cash 4,100, Debit Accounts Receivable 4,000 and Debit Interest Revenue 100. b. Debit cash 5,200, Credit Accounts Receivable 4,000 and Credit Interest Revenue 1,200. C. Debit cash 4.100, Credit Accounts Receivable 4.000 and Credit Interest Revenue 100. d. Debit cash 4,000, Credit Accounts Receivable 4.000. 0. Debit cash 4,200, Credit Accounts Receivable 4,000 and Credit Interest Reveme 200. 11. S & E Company is trying to decide which method of estimating bad debt expense to use at the end of the current year. If will use a 20% rate if it uses the total receivable method. It will use a 1% rate if it uses the total sales method or a 1.4% rate if it uses the credit sales method. At fiscal year end, S & E Company had an accounts receivable balance of $135.000. For the same fiscal year the company had total sales of $2,700,000 (of which S500,000 were cash sales). Which method of estimating the bad debt expense is used if the amount used in the adjusting journal entry is $27.000? (Note: Prior to the year-end adjusting entry, the allowance for doubtful accounts had a debit balance of $2.000.) a. The percent of accounts receivable method. b. The percent of total sales method. c. The percent of credit sales method. d. It could be two of the three methods. e. Could not be any of the three methods