Jay Inc. estimates uncollectible accounts using the percentage-of-receivables method and expects that 3.5% of outstanding receivables will be uncollectible for 2016. The balance in Accounts Receivable is $243,000, and the Allowance for Doubtful Accounts has a credit balance of $4,300 before adjustments at year-end. The Bad Debt Expense for 2016 will be:

Select one:

a. $8,505

b. $5,423

c. $4,205

d. $4,300

Question 6

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On December 31, 2015, Sveva Inc. has total liabilities of $252,000 and total equity of $420,000. The company needs to raise additional funds through debt and equity. The company will issue 40,000 shares of common stock at $4.50 per share and in addition it intends to borrow as much as it can from Bank of Switzerville. Bank of Switzerville requires a maximum debt-to-asset ratio of 0.75. What is the maximum additional amount that Sveva can borrow after the additional stock is issued?

Select one:

a. $1,236,000

b. $852,000

c. $1,548,000

d. $639,000

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In which order are current assets listed on the balance sheet?

Select one:

a. cash, inventories, accounts receivable, short-term investments

b. cash, inventories, short-term investments, accounts receivable

c. cash, accounts receivable, inventories, short-term investments

d. cash, short-term investments, accounts receivable, inventories