In the closing process of the accounting cycle, the accountant closed the dividends account at year-end by debiting Income Summary and crediting the dividends account. The balance of Income Summary after closing revenue, expenses and dividends are closed to Retained Earnings. What is the effect of these entries on current-year profit and the balance in the equity account(s) at year-end? A. Profit is overstated; balance in the retained earnings account is correct. B. Profit is correct; balance in the retained earnings account is overstated. C. Profit is understated; balance in the share capital account is correct. D. Profit is correct; balance in the share capital account is correct. 5. SEALIFE Company uses the percentage of receivable method in estimating uncollectible accounts receivable. The aging analysis of accounts receivable at 31 December 2019 follows: 6. Age Group Total $52,000 $30,000 $13,000 Percentage uncollectible Not yet due 1-30 days past due 31-60 days past due 1% If SEALIFE's Allowance for Doubtful Accounts at 31 December 2019 was $2,160, the percentage estimated uncollectible for receivables that are past due for 31 - 61 days is: A. 4% B. 5% C. 6% D. 8% Steve Company estimates uncollectible accounts receivable using percentage of receivable method. During the month of August, the company wrote off a $7,000 receivable. Following the adjusting entry for August, the credit balance in the Allowance for Doubtful Accounts was $6,000 larger than it was on 1 August. What amount of bad debt expense was recorded for August? A. $5,000 B. $2,000 C. $3,000 D. $13,000 7. ABC Limited has a notes payable of $50,000 which will mature in five months. Management has both the intent and the ability to refinance it by taking out a new loan of the same amount at the due date which would be due only after 5 years. How would this situation be reported in financial statements prepared as of today's date? A. The original notes payable of $50,000 is classified as current, with a footnote describing management's plan for refinancing. The original notes payable of $50,000 is classified as current and the new loan is reported as a long-term liability. C. The original notes payable of $50,000 is classificd as long-term; the new loan of $50,000 is not included in liabilities at this date. D. The original notes payable of $50,000 need not be reported at all; only the new loan of $50,000 is reported as a long-term liability. 8. B