Clicker Question Preparation Guide: Ch. 8&9 Clicker questions will be asked in class based on your completion of this preparation guide. You will not have time to complete this guide in class! You are required to handwrite your answers to this assignment. Part 1: Accounts Receivables and Allowance Method 1) Spencer Co. is a large wholesaler of electronics. At the end of 2023, the company's controller estimates 5% of the $212,500 in Accounts Receivable will be uncollectible. a. Write the journal entry to record Bad Debt Expense for the period if the Allowance for Doubtful Accounts has a credit balance of $2,550 before this adjusting entry is posted: b. How does the posting of this journal entry affect the accounting equation? c. What is the Net Realizable Value of Accounts Receivable reported in Spencer Co.'s balance sheet as of Dec. 31, 2023? 2) (Continuation of question 1). Assume that during 2024, a total of $3,725 Accounts Receivable has to be written off due to customers' inability to pay what they owe Spencer Co. a. What iournal entrv would be used to record this write-off of $3.725 ? b. How does the posting of this journal entry affect the accounting equation? c. What is the Allowance for Doubtful Accounts balance after this write off? (Your answer should indicate the amount and whether it is a Debit or Credit balance. Hint: Use a T-account to determine your answer.) d. Spencer Co. assumes that at the end of 2024,5% of its new $225,000 Accounts Receivable balance will be uncollectible. Using the Allowance for Doubtful Accounts balance from above (question 2) c.) determine the Bad Debt Expense that would be recorded at the end of 2024 and enter the journal entry below: Part 2: Notes Receivable 3) On August 1, 2023, Castle Inc. lends $16,000 to Knight Co. for 6 months. What inurnal entrv dnes Castle Inc. res.ord for this transaction? 4) (Continuation of question 3). The Note Receivable is established with a 3% annual interest rate, and the terms of the note states that the principal and interest will be due and paid on February 1, 2024. What adjusting journal entry is needed to accrue interest revenue earned for 2023 before Knight Co. prepares financial statements on Neremher 31 n073? 5) (Continuation of question 3 \& 4). On February 1, 2024, Knight Co. pays all principal and interest owed to Castle Inc. Write the journal entry (from the viewpoint of Castle Co.) to record the collection. Part 3: PP\&E Transactions 6) Sneed Inc. buys equipment on October 1,2023 for $600,000 cash. They estimate the equipment will have a salvage value of $100,000 and a useful life of 10 years. a. Write the journal entry to record depreciation for 2023. b. Record the journal entry to record depreciation expense for the second year. c. What is the book value of this equipment on the December 31, 2024 Balance Sheet? 7) What is the total cost (the "capitalized" cost) of machinery recently purchased and based on the following information: 8) Maverick Industries purchased equipment on July 1, 2023 for $35,000. The equipment is estimated to have a $3,750 salvage value at the end of its 5 -year life. The company uses straight-line method of depreciation. What is the balance in accumulated depreciation at 12/31/26 ? Question 9 (below) will be covered on Day 2 of Chapter 9 coverage. No clicker questions will come from question 9 since we haven't covered it yet. Still a great problem to practice before the exam! 9) On March 1, 2023, Nugget Industries sells machinery for $55,000. The machinery originally cost $123,000 and had an estimated 8-year life with an expected salvage value of $21,000. The Accumulated Depreciation account had a balance of $85,876 on December 31, 2022. a. What is the gain or loss on the date of the sale? (Hint: Don't forget to update depreciation through the date of sale first!) b. What is the journal entry to record this sale