Question 1. ABC Company uses the allowance method for doubtful accounts. Total credit sales are $1,200,000, and accounts receivable on 12/31/2011 are $100,000. Bad debts are estimated at 5% of accounts receivable. Assuming that the allowance for doubtful accounts currently has a debit balance of $100, bad debts expense for 2011 is.

		$5,000
		$5,100
		$4,900
		$60,000
		None of the above

Question 2. City Sales had net credit sales in June of $60,000. Accounts receivable are $10,000 and Allowance for Doubtful Accounts has a $300 credit balance. If City estimates bad debts as 5% of receivables, the net realizable value of the Accounts Receivable AFTER the adjusting entry is:

		$10,000
		$9,700
		$9,200
		$9,500
		None of the above

Question 3. There is a credit balance of $3,000 in BEST Company's Allowance for Doubtful Accounts. An aging analysis of accounts receivable indicates that $20,000 are expected to be doubtful. The amount of bad debts expense to record for the period is:

		$20,000
		$3,000
		$23,000
		$17,000
		None of the above.

Question 4. A writeoff of an account under the allowance method would cause total current assets to be:

		smaller
		larger
		unknown.
		unchanged.
		None of the above.