Question
I. A Retail Company uses the allowance method (balance sheet approach) to determine bad debt expense. By aging its accounts receivable, the company has determined
I. A Retail Company uses the allowance method (balance sheet approach) to determine bad debt expense. By aging its accounts receivable, the company has determined that the estimated portion of total accounts receivable of $8,000,000 that are uncollectible totals $120,000. The unadjusted balance in the allowance for uncollectible accounts is a debit balance of $14,000. What entry is needed to record bad debt expense?
II. A Corp. sold accounts receivable of $257,000 to a factor with no recourse. The factor charges a 4% factoring fee. What is the journal entry to record the sale if the accounts receivable to the factor?
III. James Co. purchased equipment on October 7, 20X4 for $100,000. The equipments estimated life is 3 years and it has an estimated salvage value of $4,000. The company uses straight-line depreciation, rounding depreciation expense to the nearest whole month. What was the depreciation expense for the year ended December 31, 20X4?
a. $32,000. b. $24,000. c. $16,000. d. $8,000.
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