Question
Donovan Co. uses the aging method to allow for uncollectible accounts. Donovan's accountants have estimated that $37,000 of current accounts receivable will eventually become uncollectible.
Donovan Co. uses the aging method to allow for uncollectible accounts. Donovan's accountants have estimated that $37,000 of current accounts receivable will eventually become uncollectible. The current balance of the Allowance for Uncollectible Accounts is an $4,000 credit. For what amount should the Allowance account be adjusted this period?
a. $41,000 | ||
b. $37,000 | ||
c. $34,000 | ||
d. $33,000 |
27. James Co. is a brand new corporation that has not yet issued any stock. The corporation has approved the issuance of 2,500 shares of stock with a $2 par value to Tom Mills in exchange for land appraised at $45,000. Upon acquiring the land, James Co.'s land account should be debited for:
a. $40,000 | ||
b. $45,000 | ||
c. $35,000 | ||
d. $5,000 |
28. A truck was purchased for $25,000. It had a five-year life and a $4,000 residual value. Under the straight-line method, depreciation expense each year is
a. $4,000 | ||
b. $5,000 | ||
c. $4,200 | ||
d. $2,000 |
Generally accepted accounting principles encompass the conventions, rules and procedures necessary to define accepted accounting practice at a particular time.
a. True | ||
b. False |
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