Indicate your answer to the multiple choice questions by entering your response provided. These pages will not be graded. 1. Which of the following concepts relates to using the allowance method in ce ascounts receivable? Bad debt expense is an estimate that is based on historical and prospective inform Bad debt expense is based on the actual amounts determined to be uncollectible c. Bad debt expense is an estimate that is based only on an analysis of the receivables d. Bad debt expense is management's determination of which accounts will be sent to the attorney for collection. Tontohet is bandets 2. When a company holds between 20% and 50% of the outstanding stock of an investee, which of the following statements applies? a. The investor should always use the equity method to account for its investment. The investor should use the equity method to account for its investment unless circumstances indicate that it is unable to exercise "significant influence over the investee. C. The investor must use the fair value method unless it can clearly demonstrate the ability to exercise "significant influence over the investee. d. The investor should always use the fair value method to account for its investment. 3. Wellington Corp. has outstanding accounts receivable totaling $5 million as of December 31 and sales on credit during the year of $25 million. There is also a debit balance of $20,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense? 410 a. $2,000,000. b. $ 380,000 C S 400,000 d. $ 420,000. 20,000 400, oce Richman Company purchased $900,000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2018, with interest payable on July 1 and January 1. The bonds sold for $937.422 at an effective interest rate of 7%6. Using the effective interest method, Richman Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2018 and December 31, 2018 by the amortized premiums of $3,186 and $3,294, respectively. At December 31, 2018, the fair value of the Carlin, Inc. bonds was $954,000. What should Richman Company report as other comprehensive income and as a separate component of stockholders' equity? a. $0 $6,480 /c. $16,578 d $23,058