over 90 Tour company previously averaged about 20% of its total accounts receivable in the due" met category and now has 35% in this category. All else equal, using the aging ofaccounts receta amount of the bad debt adjustment will: A fall, increasing the ending balance of the allowance account. C. fall, decreasing the ending balance of the allowance account. D. rise, decreasing the ending balance of the allowance account. B. rise, increasing the ending balance of the allowance account. 62 On average, 5% of total accounts receivable has been uncollectible in the past. At the end of the year, balance of accounts receivable is $100,000 and the allowance for doubtful accounts has a credit balance of S500. Credit sales during the year were $150,000. Using the aging of accounts receivable method, the estimated bad debt expense would be: A. $4,500. B. $5,000. C. $5,500. D. indeterminable; information, the percentage of credit sales method should be used. the aging of accounts receivable method cannot be used, because, based on this 63. Before adjustment, the allowance for doubtful accounts has a credit balance of $2,700. The company had $140,000 of net credit sales during the period and historically fails to collect 4% ofcredit sales. The company uses the percentage of credit sales method of estimating doubtful accounts. After adjusting for estimated bad debts, the new balance in the allowance for doubtful accounts account will be: A. $8,300. B. $5,400 C. $2,900. D. indeterminable; it cannot be determined from the information given. 64, Your company has averaged about 26% of its accounts receivable in the "over 90 days past due" category and now forecasts 18% in this category. You use the aging of accounts receivable method of estimating bad debt expense. If the total of credit sales remains unchanged from previous months and no write offs are made, the estimate of bad expense based on the new forecast will: A. increase over the estimate for previous months B. decrease over the estimate for previous months. C. not change D. will depend on the percentage of credit sales deemed uncollectible. 65. When a company makes an adjustment in anticipation of future uncollectible debt: A. it debits an asset account and credits a liability account. B. it debits a revenue account and credits an asset account, C. it debits a revenue account and credits an expense account. D. it debits an expense account and credits a contra-asset account. 66. Your company uses the percentage of credit sales method for calculating bad debt expense. If your company has $216,000 in total sales, of which $178,000 are on credit, and its historical bad debt loss is 6% of credit sales, bad debt expense: A. is $12,960. B. is $10,680. C. is $38,000 D cannot be determined from the information given.