Question
Use the following information to answer Question 18-19. Alicia Corporation was established on 1/1/2011. The ending balance of Allowance for doubtful account was $2,000 on
Use the following information to answer Question 18-19.
Alicia Corporation was established on 1/1/2011. The ending balance of Allowance for
doubtful account was $2,000 on 12/31/2011. During 2012, the company experienced the following:
Beginning balance of Accounts receivable account was $50,000
credit sales $100,000
collections on credit sales $60,000
aging analysis of accounts deemed uncollectible at 12/31/2012 shows $8,000 of potentially uncollectible accounts.
No accounts receivable was determined to be uncollectible during 2012.
What is Alicias net book value of accounts receivable on January 1, 2013?
a. $100,000
b. $32,000
c. $82,000
d. $40,000
e. $90,000
19. Assuming that Alicia uses the aging approach to estimate uncollectible accounts, what is the amount of bad debt expense for 2012?
a. $6,000
b. $7,000
c. $8,000
d. $9,000
e. $12,000
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