Assume the same A/R and ADA balances and the same net sales as in question #1. If ABC Corp uses the percentage of sales method and estimates that 1% of net sales will not be collected, how much will be reported as ADA on its 12/31/20 balance sheet?

a) $10,000 b) $11,000 c) $14,000 d) $7,000

Intermediate Accounting I

Prepare a multiple step income statement and a comprehensive income statement based on the following data:

Sales $1,700,000

Beginning inventory 80,000

Ending inventory 70,000

Dividends paid 65,000

Freight in 40,000

Freight out 15,000

Bad debt expense 18,000

Allowance for doubtful accounts 55,000

Purchases 800,000

Purchase returns 60,000

Purchase discounts 12,000

Sales returns 30,000

Sales discounts 13,000

Unrealized loss- available for sale securities 22,000

Loss from sale of available for sale securities 25,000

Loss from hurricane damage 50,000

Loss from discontinued operations 125,000

Unrealized gain- trading securities 35,000

Salary Expense 300,000

Rent expense 120,000

Depreciation expense 100,000

Prepaid insurance 62,000

Unearned rent revenue 50,000

Interest revenue 10,000

Income tax rate 20%