ASSUME THE FOLLOWING FOR DAVE COMPANY 5 600,000 8,000 Sales on account Sor 2012
ID: 2514316 • Letter: A
Question
ASSUME THE FOLLOWING FOR DAVE COMPANY 5 600,000 8,000 Sales on account Sor 2012 Sales discounts foe 2012 Cash collections of accounts receivable in 2012 520,000 Accounts Reoeivable, 1/1/2012 Allowance for Doubdul Accounts 1/1/2012 (credit) 90,000 3,000 During 2012, $2,000 of accounts roceivable were writen off as uncollectible. fth eding balance in accounts receivable. 4. Dave Company financial statement information for 2012 would show net sales as: For questions below under the allowance method, assume the 2012 adjustment has been $592,000 under both the Direct and Allowance methods. b $600,000 under the Allowance method and $392,000 under the Direct method $600,000 under the Direct d. $600,000 under both the Diroct and Allowance methods. e. None of the above method and $$92,000 under the Allowance method. 15. Dave Company financial statement information for 2012 would show Bad Debts Expense under the Direct method as: $3,000 b. $2,000. $1,000 d. $4,000. e. None of the above 16. Dave Company financial statement information for 2012 would show Bad Debts Expense under the Allowance method as a $2,400. b. $4,100. $4,040 d $5,100 c None of the above 17. Dave Company finascial statement information for 2012 would show gross accounts receivable as: a $170,000 b$172,000 e $80,000 d $600,000. e None of the above. 18. Walter Company parchasod on account $72,000 of goods for resale on January 10, 2012 The serms were 2/10, n/30 On January 14, 2012 $14,000 of the goods were found defective and were returned for credit. The amount due January 17, 2012 would inelude a. A credit to Cash for $58,000. was paid on January 17, 2012. The journal entry on b. A credit to Purchases Discounts for $1,160. e. A debit to Accounts Payable for $56,840 d. A credit to Purchases for $14,000 e. None of the above 19. All of the following accounts normally have debit balances except a. Transportation Out b. Purchases c. Sales returns& allowances d. Purchases Descounts e DividendsExplanation / Answer
Q14. Answer is a. $ 592000 under both direct and allowance method. Q15. Answer is b. $ 2000 Q16 Answer is e. None of above Explanation: Accounts receivable balance at end: Bbeginning Balance 90000 Add: Credit sales net 592000 Less: Collections 520000 Less: Write off 2000 Ending balance 160000 Allowance balance required @ 3% 4800 Bad debts expense: Beginning balance of Allowance 3000 Less: Write off 2000 Balancec at end 1000 Required balance 4800 Bad debts expense: 3800 Q17. Answer is e. Non of above. Accounts receivable Gross is $ 160,000 (as computed above)