Accounting: Questions and Answers
An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a
debit to Allowance for Doubtful Accounts for $3,300.
debit to Bad Debt Expense for $4,500.
credit to Allowance for Doubtful Accounts for $4,500.
debit to Bad Debt Expense for $3,300.
The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days?
96.1
48.7
36.5
60.8
Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be
$4,100.
$6,100.
$4,072.
$3,760.
Given the following account balances at year end, compute the total intangible assets on the balance sheet of Janssen Enterprises.
Cash
$1,500,000
Accounts Receivable
4,000,000
Trademarks
1,000,000
Goodwill
2,500,000
Research & Development Costs
2,000,000
$7,500,000.
$3,500,000.
$9,500,000.
$5,500,000.
On January 1, a machine with a useful life of five years and a residual value of $40,000 was purchased for $120,000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?
$28,800.
$38,400.
$48,000.
$23,040.
As a recent graduate of State University you're aware that IFRS requires component depreciation for plant assets. A friend has asked you to succinctly explain what component depreciation means. Which of the following correctly describes component depreciation?
The method used to prorate annual depreciation
debit to Allowance for Doubtful Accounts for $3,300.
debit to Bad Debt Expense for $4,500.
credit to Allowance for Doubtful Accounts for $4,500.
debit to Bad Debt Expense for $3,300.
The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days?
96.1
48.7
36.5
60.8
Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be
$4,100.
$6,100.
$4,072.
$3,760.
Given the following account balances at year end, compute the total intangible assets on the balance sheet of Janssen Enterprises.
Cash
$1,500,000
Accounts Receivable
4,000,000
Trademarks
1,000,000
Goodwill
2,500,000
Research & Development Costs
2,000,000
$7,500,000.
$3,500,000.
$9,500,000.
$5,500,000.
On January 1, a machine with a useful life of five years and a residual value of $40,000 was purchased for $120,000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?
$28,800.
$38,400.
$48,000.
$23,040.
As a recent graduate of State University you're aware that IFRS requires component depreciation for plant assets. A friend has asked you to succinctly explain what component depreciation means. Which of the following correctly describes component depreciation?
The method used to prorate annual depreciation