5 multiple choice questions. Show all work on computational questions and clearly identify answer.

1. Lentil Co. prepared an aging of its accounts receivable at December 31, 2020 and determined that the amount expected to be collected was $900,000. Additional information is available as follows:

Allowance for uncollectible accounts at 1/1/20credit balance $102,000

Accounts written off as uncollectible during 2020 69,000

Accounts receivable at 12/31/20 975,000

Uncollectible accounts recovered during 2020 15,000

For the year ended December 31, 2020, Lentil's bad debt expense would be

a. $75,000.

b. $69,000.

c. $48,000.

d. $27,000.

2. For the year ended December 31, 2020, Upright Co. estimated its allowance for uncollectible accounts using the year-end aging of accounts receivable. The following data are available:

Allowance for uncollectible accounts, 1/1/20 $126,000

Uncollectible accounts written off, 11/30/20 104,000

Estimated uncollectible accounts per aging, 12/31/20 156,000

After year-end adjustment, the bad debt expense for 2020 should be

a. $104,000.

b. $90,000.

c. $156,000.

d. $134,000.

3. Nester Co.'s allowance for uncollectible accounts was $190,000 at the end of 2020 and $180,000 at the end of 2019. For the year ended December 31, 2020, Nester reported bad debt expense of $31,000 in its income statement. What amount did Nester debit to the appropriate account in 2020 to write off actual bad debts?

a. $10,000

b. $21,000

c. $31,000

d. $41,000

4. Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account

a. increases the allowance for uncollectible accounts.

b. has no effect on the allowance for uncollectible accounts.

c. has no effect on net income.

d. decreases net income.

5. The following accounts were abstracted from Saturn Co.'s unadjusted trial balance at December 31, 2020:

Debit Credit

Accounts receivable $750,000

Allowance for uncollectible accounts 8,000

Net credit sales $3,000,000

Saturn estimates that 6% of the gross accounts receivable will become uncollectible. After adjustment at December 31, 2020, the allowance for uncollectible accounts should have a credit balance of

a. $180,000.

b. $168,000.

c. $57,000.

d. $45,000.