| A. INSTRUCTIONS: Answer the following questions or complete the statements by writing the | |
| appropriate words or amounts in the Answers column. | |
| | Answers | | |
| 1. Allowance for Doubtful Accounts has a credit balance of $1,000 at the | | | |
| end of the year, before adjustments. Sales for the year amounted to | | | |
| $950,000, and sales returns and allowances amounted to $50,000. If | | | |
| uncollectible accounts expense is estimated at 1% of net sales, the | | | |
| amount of the appropriate adjusting entry will be | $ | 1 | |
| 2. If, instead of a percentage of net sales, the adjusting entry in Question 1 | | | |
| is based on an analysis of receivables that indicates doubtful accounts | | | |
| of $9,500, the amount of the adjustment will be | $ | 2 | |
| 3. Allowance for Doubtful Accounts has a debit balance of $700 at the end | | | |
| of the year, before adjustments and an analysis of receivables indicates | | | |
| doubtful accounts of $9,000, the amount of the appropriate adjusting | | | |
| entry will be | $ | 3 | |
| 4. The maturity value of a $70,000, 90-day, 6% note receivable is | $ | 4 | |
| 5. In writing off an uncollectible account by the direct write-off method, | | | |
| the account debited is | | 5 | |
| 6. At the end of the fiscal year, after the accounts are closed, Accounts | | | |
| Receivable has a balance of $8,000,000, and Allowance for Doubtful | | | |
| Accounts has a balance of $60,000. What is the expected net realizable | | | |
| value of the receivables? | $ | 6 | |
| 7. In which subsection of the balance sheet would receivables that are | | | |
| expected to be realized in cash within one year be reported? | | 7 | |
| 8. Allowance for Doubtful Accounts is listed on the appropriate financial | | | |
| statement in the subsection titled | | 8 | |
| 9. Notes receivable expected to be collected in 2 years are listed on the | | | |
| financial statements in the subsection titled | | 9 | |
| 10.What is the due date of a 3 month note dated December 30, 2007? | | 10 | |
| 11-12. Coral Company issued a 60-day, 8% note for $15,000, dated April 5, to Kandue Company on account |
| 11. Determine the due date of the note. | | 11 | |
| 12. Determine the maturity value of the note. | $ | 12 | |
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