D) Bad Debts Expense Allowance for Doubtful Accounts 12,000 12,000 16. River Forest, Inc.'s $180,000 Accounts Receivable balance at December 31 consisted of $160,000 current balances and $20,000 past-due balances. At December 31, the Allowance for Doubtful Accounts had a credit balance of $1,600. River Forest estimated that 2% of current balances and 15% of past-due balances will prove uncollectible. The adjusting entry to record credit losses is: 5,800 4,600 5,800 A) Bad Debts Expense Allowance for Doubtful Accounts B) Bad Debts Expense Allowance for Doubtful Accounts C) Bad Debts Expense Accounts Receivable D) Bad Debts Expense Allowance for Doubtful Accounts 4,600 4,200 7,400 4,200 7,400 17. In accounting for credit losses: A) The allowance method matches losses with related sales better than the direct write-off method. B) The direct write-off method involves estimating credit losses. C) The direct write-off method consistently understates assets on the balance sheet. D) Both (B) and (C) 18. Which of the following formula computes the average collection period? A) 365 / Average accounts receivable B) Account receivable / Average daily sales C) Sales / Average accounts receivable D) 365 / Accounts receivable turnover 19. A $20,000, 3-month, 8% note is dated June 1, 2016. The maturity date and maturity value of the note are, respectively: A) September 1, 2016: $20,400 B) August 29, 2016; $20,400 C) September 1, 2016: $400 D) August 29, 2016: $20,000 20. On December 11, 2019, Red gave a $60,000, 60-day, 9% note to Cardinal in payment of an account. On December 31, 2019, cardinal should record: A) $300 interest income B) $300 interest expense C) $900 interest income D) $900 interest expense