Answer the following 1-9 intermediate accounting questions:

1. On April 1, Aloe, Inc., factored $80,000 of its accounts receivable without recourse. The factor retained 10% of the accounts receivable as an allowance for sales returns and charged a 5% commission on the gross amount of the factored receivables. Aloe would receive $76,000 cash from the factored receivables?

True

False

2. Southwest Company gathered the following reconciling information in preparing its October bank reconciliation:

Cash balance per bank statement, 10/31 $8,500

Deposits in transit 600

Notes receivable and interest collected by bank 1,900

Bank charge for travelers checks 65

Outstanding checks 7,000

NSF check 510

The adjusted cash balance per books (true cash) on October 31 is:

A. 8500

B. 9100

C. 2100

D. 4535

3. Accounts receivable net realizable value for Castle Company. increased from $380,000 to $430,000 from January 1, 2018 to December 31, 2018. Also, you collected the following information:

Accounts receivable, 12/31/17	$533,000
Accounts receivable, 12/31/18	$622,000
Accounts written off as uncollectible	$21,000
Recovered accounts, that were previously written off	$6,000

What are the balances for allowance for doubtful accounts at the beginning and end of the period

A. $380,000 and $430,000

B. $153,000 and $192,000

C. $33,000 and $22,000

D. Could not be determined

4. Accounts receivable net realizable value for Castle Company. increased from $380,000 to $430,000 from January 1, 2018 to December 31, 2018. Also, you collected the following information:

Accounts receivable, 12/31/17	$533,000
Accounts receivable, 12/31/18	$622,000
Accounts written off as uncollectible	$21,000
Recovered accounts, that were previously written off	$6,000

What is bad debt expense adjusted entry that Castle recorded in 2018?

A. DR Bad debt expense 50,000

CR Allowance for doubtful accounts 50,000

B. DR Bad debt expense 21,000

CR Allowance for doubtful accounts 21,000

C. DR Bad debt expense 27,000

CR Allowance for doubtful accounts 27,000

D. None of the above

5. Vincom Inc. had $600,000 of credit sales in 2018. At December 31, the company had a $100,000 debit balance in the Accounts Receivable account and a $2,000 debit balance in the Allowance for Bad Debts account. BobCat Inc. estimates bad debts as 3.8% of outstanding accounts receivable. The appropriate adjusting entry at December 31, 2018

A. DR Bad debt expense 5,800

CR Allowance for doubtful accounts 5,800

B. DR Bad debt expense 3,800

CR Allowance for doubtful accounts 3,800

C. DR Bad debt expense 1,800

CR Allowance for doubtful accounts 1,800

D. None of the above

6. Charter Stone Inc. has the following information:

Company employs aging method for estimation of uncollectible accounts. Aging method indicates that $82,000 of accounts receivables are estimated to be uncollectible as of December 31, 2018. (See table below)

What was a bad debt expense for 2018? (record j/e)

As of 12/31/18	A/R	% Uncollectible	Allowance for doubtful accounts
Not past due	$600,000	2%	$12,000
Past due 0-30 days	$140,000	5%	$7,000
Past due 31-60 days	$190,000	20%	$38,000
Past due more than 60 days	$50,000	50%	$25,000
	$980,000		$82,000

The following data are available:

Allowance for uncollectible accounts CR, 1/1/18 $126,000

No provision for uncollectible accounts was recorded during 2019

Uncollectible accounts written off, 11/30/18 104,000

The value for accounts receivable, net that will be reported on the Balance Sheet as of 12/31/18 is 940,000

A. True

B. False

7. Realized Inc. has the following information:

Company employs aging method for estimation of uncollectible accounts. Aging method indicates that $82,000 of accounts receivables are estimated to be uncollectible as of December 31, 2018. (See table below)

What was a bad debt expense for 2018? (record j/e)

As of 12/31/18	A/R	% Uncollectible	Allowance for doubtful accounts
Not past due	$600,000	2%	$12,000
Past due 0-30 days	$140,000	5%	$7,000
Past due 31-60 days	$190,000	20%	$38,000
Past due more than 60 days	$50,000	50%	$25,000
	$980,000		$82,000

The following data are available:

Allowance for uncollectible accounts CR, 1/1/18 $126,000

No provision for uncollectible accounts was recorded during 2019

Uncollectible accounts written off, 11/30/18 104,000

What is the year-end adjustment (j/e)?

A. DR Bad debt expense 60,000

CR Allowance for doubtful accounts 60,000

B. DR Bad debt expense 82,000

CR Allowance for doubtful accounts 82,000

C. DR Bad debt expense 104,000

CR Allowance for doubtful accounts 104,000

D. None of the above

8. Q Co. sells $37,000 of accounts receivable to a factor without recourse. The factor charges a 15% fee. Pick the correct statement

A. Loss on sale of Accounts receivables 5,550

B. Cash collection from the sale of Accounts receivable is 5,550

C. Cash collection from the sale of Accounts receivable is 37,000

D. Cash collection from the sale of Accounts receivable is 31,450

E. A and D

9. Sun glow Co. loaned funds to ABC. ABC signed a $10,000, non-interest-bearing, four-year note in exchange for the loan. The market rate at the time was 8%. The journal entry to record this transaction will include

A. DR Notes Receivable $10,000 and CR Cash $10,000.

B. DR Notes Receivable $10,000 and CR Cash $7,350.

C. DR Notes Receivable $7,350 and CR Cash $7,350.

D. DR Notes Receivable 7,350, CR Discount on Notes Receivable 2,650 and Cash 10,000