QUESTION 21 Cherry Falls Inc. (CT) sells Red Sox baseball hats CFI uses the perpetual method of accounting for inventory, and the gross method for recording t statements o C r y financial On October 3, CFI receives a payment in fall from a customer who purchased $1.000 of hats on September 8, 1/15, 30 (Hint Note that the customer puid AFTER the discount period) select A: No effect on net income What is the effect on net income for this transaction? Note: if the event would NOT cause recognition of revenue A No effect on net income B. Decrease net income o Increase net income QUESTION 25 The Larion Company uses the allowance method to account for uncollectible accounts. Management became convinced that a $16,000 account receivable was uncollectible and should be witten-oft. Just prior to the write of total accounts receivable were $260,000 and the Allowance for Uncollectible Accounts had a credit balance of $19,000 After Larkin writes of the 516,000 uncollectible account, the net realizable value of accounts receivable will be A 241000 B 244000 225000 D 247000 QUESTION 26 Use the information below to answer this question and the following 2 questions The following information is provided for the Dawdy Company at December 31, Year3, just before any adjusting entries were made. Net Credit Sales during Year3 $900,000 Accounts Receivable Balance at 12/31/Year3 120,000 Allowance for Uncollectible Accounts (credit balance) at 12/31/Year3 Note this is a normal balance for a contra asset (aka credit balance) 3,000 Assume Dawdy prepared the following aging of accounts receivable at December 31, Year3 Accounts Estimate of uncollectible Age Receivable % Estimated Uncollectible amount Current $80,000 10% 8,000 31-60 days 20,000 15% 3,000 61-90 days 15,000 4,500 Over 90 days 5,000 2,000 Totals $120,000 $17,500 After the adjusting entry, the balance in the bad debt expense would be A 21500 B 17500 C 14500 D.6500 E 23500 D _=_4651318 course_id=_14395_1&content_id=_1305250_18stes QUESTION 27 After the adjusting entry has been made, the Net Realable Value of AR is bigger True False QUESTION 28 Dawdy just received word that the customer who has the AR over 90 days past due for 55.000 has gone bankrupt and will not be paying its bil Select the two accounts that will be impacted by this write-off "Remember that Dawdy uses an allowance method, not the direct write-off method. Bad Debt Expense Revenue Allowance for Uncollectible Accounts Accounts Payable Accounts Receivable Cash