Account: Chiller Company

Good Essays
Topics: Depreciation
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

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