Pax Company reported total sales for the current year to be $10,000,000, including cash sales of...

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Pax Company reported total sales for the current year to be $10,000,000, including cash sales of $2,000,000. Management estimates bad debts to be 5% of credit sales. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $40,000. The ending balance of the Allowance for Doubtful Accounts after adjustment will be: A) $240,000 B) $440,000 C) $340,000 D) $360,000 Cybele Company lends Tiberius Company $120,000 on August 1, 2016 in exchange of a 9-month, 12% interest note. If Cybele Company accrued interest on its December 31, 2016 year-end, what entry must it make to record the collection of the note and interest at its maturity date? A) Cash 130,800 Notes Receivable 120,000 Interest Income 10,800 Notes Receivable B) 120,000 Interest Receivable 6,000 Interest Income 4,800 Cash 130,800 Cash 130,800 Notes Receivable 120,000 Interest Receivable 6,000 Interest Income 4,800 Cash D) 130,800 Notes Receivable 120,000 Interest Receivable 4,800 Interest Income 6,000 Pax Company reported total sales for the current year to be $10,000,000, including cash sales of $2,000,000. Management estimates bad debts to be 5% of credit sales. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $40,000. The ending balance of the Allowance for Doubtful Accounts after adjustment will be: A) $240,000 B) $440,000 C) $340,000 D) $360,000 Cybele Company lends Tiberius Company $120,000 on August 1, 2016 in exchange of a 9-month, 12% interest note. If Cybele Company accrued interest on its December 31, 2016 year-end, what entry must it make to record the collection of the note and interest at its maturity date? A) Cash 130,800 Notes Receivable 120,000 Interest Income 10,800 Notes Receivable B) 120,000 Interest Receivable 6,000 Interest Income 4,800 Cash 130,800 Cash 130,800 Notes Receivable 120,000 Interest Receivable 6,000 Interest Income 4,800 Cash D) 130,800 Notes Receivable 120,000 Interest Receivable 4,800 Interest Income 6,000

Answer rating: 100% (QA)

Q1 Correct Option D ie 360000 Allowance for doubtfull ... View the full answer