Account: Chiller Company

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Submitted by HOWELL, JONATHAN (Jonathan.Howell001) on 4/11/2012 12:59:22 PM

Points Awarded| 20.00|
Points Missed| 5.00|
Percentage| 80.0%|

1.
Chiller Company has credit sales of $5.60 million for year 2010. Chiller estimates that 1.32% of the credit sales will not be collected. Historically, 4% of outstanding accounts receivable is uncollectible. On December 31, 2010, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $3561. Chiller prepares a schedule of its December 31, 2010, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:   

Assuming the company uses the percent of sales method, what is the amount that Chiller will enter as the Bad Debt Expense in the December 31 adjusting journal entry? A) $55,439.41
B) $73,920.00
C) $48,317.41
D) $70,359.00
E) $66,167.80
Points Earned:| 1.0/1.0| |
Correct Answer(s):| B|

2.
MixRecording Studios purchased $7,800 in electronic components from TechCom. MixRecording Studios signed a 60-day, 10% promissory note for $7,800. TechCom's journal entry to record the sales portion of the transaction is: A) 

B) 
C) 
D) 
E) 
Points Earned:| 1.0/1.0| |
Correct Answer(s):| C|

3.
Failure by a promissory note's maker to pay the amount due at maturity is known as: A) Protesting a note
B) Closing a note
C) Dishonoring a note
D) Discounting a note
E) Depreciating a note
Points Earned:| 1.0/1.0| |
Correct Answer(s):| C|

4.
Temper Company has credit sales of $3.10 million for year 2010. Temper estimates that .9% of the credit sales will not be collected. On December 31, 2010, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,222. Temper prepares a schedule of its December 31, 2010, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:   

Assuming the company uses the aging of Accounts Receivable method, what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry? A) $25,246.40
B) $27,468.40
C) $23,024.40
D) $27,900.00
E) $24,420.40
Points Earned:| 1.0/1.0| |
Correct Answer(s):| C|

5.
On November 15, 2010, Betty Corporation accepted a note receivable in place of an outstanding accounts receivable in the amount of $138,460. The note is due in 90 days and has an interest rate of 7.5%. What is the appropriate journal entry to record at maturity? A) 

B) 
C) 
D) 
E) 
Points Earned:| 1.0/1.0| |
Correct Answer(s):| E|

6.
An accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period of the sales and (2) reports accounts receivable at the amount of cash to be collected is the: A) Allowance method of accounting for bad debts

B) Aging of notes receivable
C) Adjustment method for uncollectible debts
D) Direct write-off method of accounting for bad debts
E) Cash basis method of accounting for bad debts
Points Earned:| 1.0/1.0| |
Correct Answer(s):| A|

7.
Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is: A) 

B) 
C) 
D) 
E) 
Points Earned:| 1.0/1.0| |
Correct Answer(s):| A|

8.
A company's annual accounting period ends on September 30. During the current year a depreciable asset which cost $16,000 was purchased on January 1. The asset has a $2,000 estimated salvage value. The company uses straight-line depreciation and expects the asset to have a 4-year life. What is the total...
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