Bonus Exam

A company has $100,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $900 debit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for: O None of these is correct. 0 $4,000 0 $3,100 0 0 $4,900 A company has $97,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $870 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for: O $3,880 O $4,750 O $3,845 O $3,010 o $3,915 Colvin Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $160,000. The asset is expected to have a salvage value of $16,500 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be: o $34,560 o $31,320 o $86,400 o $144,000 o $46,980 Marlow Company purchased a point of sale system on January 1 for $7,300. This system has a useful life of 5 years and a salvage value of $1,350. What would be the depreciation expense for the second year of its useful life using the double-declining balance method? $1,752 $1,688 $2,380