ACCOUNTING PRINCIPLE II Student Name: Student No: Q.1 Ahmed Products is undecided about which base to use in estimating uncollectible accounts. On December 31, 2018, the balance in Accounts Receivable was $1,250,000 and net credit sales amounted to $7,500,000 during 2018. An aging analysis of the accounts receivable indicated that 5% of Accounts receivable in are expected to be uncollectible. Past experience has shown that about 1% of net credit sales eventually are uncollectible. Instructions Prepare the adjusting entries to record estimated bad debts expense using the (1) percentage of sales basis and (2) the percentage of receivables basis under each of the following independent assumptions: (a) Allowance for Doubtful Accounts has a credit balance of $6,250 before adjustment. (b) Allowance for Doubtful Accounts has a debit balance of $1,650 before adjustment. 2.2 Brama Distributors has the following transactions related to notes receivable during the last two months of the year. May. 1 Loaned $10,000 cash to E. Hoffer on a 1-year, 8 % note. Nov. 5 Made master card sales (service charge fee 3%) totaling $800 to M. Kaddafi Dec. 10 Made Brama credit card sales totaling $1,600 Dec. 31 Accrued interest revenue on all notes receivable. Journalize the previous entries 0.3 Hebron Company purchased equipment on January 1, 2018 for $150,000. It is estimated that the equipment will have a $5,000 salvage value at the end of its 5-years useful life. It is also estimated that the equipment will produce 1,450,000 units over its 4-years life. Instructions Answer the following independent questions. a) If the company uses the double-declining-balance method of depreciation, prepare the Depreciation schedule for the equipment? b) If 350,000 units of product are produced in 2018 and 320,000 units are produced in 2019, what is the book value of the equipment at December 31, 2009? The company uses the units of activity depreciation method. Q.4 MAS Company at December 31, 2018 has cash $255,000, noncash assets $750,000, liabilities $420,000, and the following capital balances: Maher $170,000, Ahmed $ 100,000 and Sami $315,000. The firm is liquidated, and $8250,000 in cash is received for the noncash assets. Maher , Ahmed and Sami income ratios are 40%, 15% and 45 %, respectively. Instructions: Prepare a liquidation entries. Q.5 Watts Company purchased equipment in 2011 for $90,000 and estimated a $6,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2017, there was $58,800 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On August 1, 2018, the equipment was sold for $20,000 Instructions: Prepare the appropriate journal entries to remove the equipment from the books of Watts Company on March 31, 2018. GOOD LUCK