Question 2 (10 marks) Below are 5 multiple choice items. Indicate the letter corresponding to the best answer for each item in the table below. M. C. Item Answer M. C. Item Answer 1 5 4 2 3 AT&U Company has the following data for the year ended December 31, Year 1: Sales (credit) $2,500,000 Sales retums and allowances 50,000 Accounts receivable (December 31, Year 1) 640,000 Allowance for doubtful accounts (before adjustment at December 31, Year 1, credit balance) 20,000 Estimated amount of uncollected accounts based on aging analysis 45,000 December 31, Year 1) 1. Refer to AT&U Company. If the company estimates its bad debts at 1% of net credit sales, what amount will be reported as bad debt expense for Year 1? a. $6,400 b. $24,500 c. $25,000 d. $45,000 2. Refer to AT&U Company. If the company uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for Year 1? a. $65,000 b. $45,000 c. $25,000 d. $20,000 3. On January 2, Alfredo Corporation sold merchandise with a gross price of $100,000 to a customer with terms of 2/10, n/30. How much in sales discounts will be recorded if payment is received from the customer on January 8? a. $0 b. $2,000 c. $98,000 d. $100,000 4. A company had sales of $40,000, sales discounts of $800, sales retums of $1,600, and commissions owed to salespeople of $600. What is net sales? a. $37,600 b. $38,400 c. $39,200 d. $40,000 5. A company's accounts receivable balance after posting net collections from customers is $150,000. Management has determined the following: $100,000 of the accounts that are 1 to 30 days past due are 2% uncollectible; and $50,000 of the accounts that are 31 to 60 days past due are 10% uncollectible. What is the net realizable value of the accounts receivable? a. $137,000 b. $139,000 c. $142,000 d. $143,000 3