At the end of January the unadjusted trial balance of Vemon

At the end of January, the unadjusted trial balance of Vemon, Inc, included the following accounts Credit 600,000 Sales (75% represent credit sales) Accounts Receivable S200,000 2,000 Allowance for Doubtful Accounts 27. Refer to the above data. Vernon estimates bad debts expense to be 2% of credit sales. What is the amount of Bad Debts 28. Refer to the above data. Vemon estimates bad debts expense to be 2% of credit sales. After the adjusting entry is made. 29. Refer to the above data. Vemon ages the accounts receivable and determines the estimated uncollectible portion to be expense recognized in Vemon\'s income statement for January? the net realizable value of Vemon\'s accounts receivable im the January 31 balance sheet is 4% of gross accounts receivable. What is the amount of Bad Debts expense recognized m Vermon\'s ncome statement for January? 30. Refer to the above data. Vemon ages the accounts receivable and determimes the estimated uncollectible portion to be 4% of gross accounts receivable. After the adjusting entry is made, the net realizable value of Vermon\'s accounts receivable in the January 31 balance sheet is 31. A company which uses the direct write-off method recognizes bad debts expense: a. As imdicated by aging the accounts receivable at the end of the period b. As a percentage of net sales during the period c. As a percentage of net credit sales durng the period d. As specific accounts receivable are determmed to be worthless e. None of the above 32. A conceptual shortcoming m the direct write-off method of accounting for bad debts is that this method violates the: a. Cost principle b. Going-concem assumption c. Matching prnciple d. Realization primciple e. None of the above 33. The account \"Allowance for Bad Debts\" is an example of what type of account? a. An gwners equity account on the balance sheet. b. An expense account included in the \"other expenses\" section of the income statement. c. A contra-asset account on the balance sheet. d. A contra-liability account on the balance sheet e. None of the above. 34. At the start of the current year, Belmonde Company had a credit balance in the Allowance for Doubtful Accounts of $10.000. During the year, a provision of 2% of sales was made for uncollectible accounts. Sales for the year were $1,000,000 and $8,000 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made durng the year. The year-end fimancial statements should show: a. Bad Debts expense of $8,000 b. Bad Debts expense of S30,000 c. Allowance for Doubtful Accounts with a balance of $22,000 d. Allowance for Doubtful Accounts with a balance of $38,000 e. None of the above

Solution

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. 27. Bad Debt Expense recognized in Jan 2% of Credit Sale 450000*2% 9000 Credit Sale 600000*75% 450000 28. Accounts Receivable 200000 Less: Allowance for Doubtful Accounts -7000 (2000-9000) 193000 29. Ending Allowance for Doubtful Accounts 200000*4% 8000 Credit Less: Beginning Allowance -2000 Debit Bad Debt Expense recognized in Jan 10000 30 Accounts Receivable 200000 Less: Allowance for Doubtful Accounts 8000 192000 31. d 32. c Since bad debt related to sale of Year 1, may be expensed on in next year when receivable dint pay\' 33. c 34. c Beginning Allowance 10000 Add: Allowance during the year 20000 1000000*2% Less: Bad Debt Written off -8000 Ending Allowance 22000